SML Planning Minute

Security Mutual Life Advanced Markets Team
  • 4.8 (19)
  • Investing
  • Updated Biweekly

SML Planning Minute shares concise and entertaining financial ideas, for individuals, families, and business owners.

  1. 1d ago

    Is It Possible to Spend Too Little in Retirement?

    Is It Possible to Spend Too Little in Retirement? Episode 390 – It has been well documented that the biggest fear people have in retirement is running out of money. Incredibly, according to a 2024 survey done by Allianz Life, 63 percent of Americans are more fearful about running out of money than they are about dying. But is it possible to overdo it? More SML Planning Minute Podcast Episodes Transcript of Podcast Episode 390 Hello, this is Bill Rainaldi, with another edition of Security Mutual’s SML Planning Minute. In today’s episode: is it possible to spend too little in retirement? It has been well documented that the biggest fear people have in retirement is running out of money. Incredibly, according to a 2024 survey by Allianz Life, 63 percent of Americans were more fearful about running out of money than they were about dying.[1] That may be taking things to an extreme, but there’s a valid point. It’s perfectly reasonable to worry about running dry when you’re used to a certain lifestyle and you no longer have a steady paycheck. And mortality tables these days are more favorable than many people realize. For example, the odds are better than 50-50, if you’re a married couple both age 62, that at least one of you is going to live past age 90.[2] So, you may have to figure out a spending plan—without the employment income you’ve become used to—for potentially 30 years or more. Retirement is a huge turning point in most people’s lives. You’re switching from a savings and accumulation mindset to one where you’re living (at least partially) off of those savings. You might have gotten used to seeing your net worth go up considerably over the last few years. But for most of us, those days are over once you make the crossover. It’s a major psychological barrier, so of course you’re going to be concerned about overspending. But how much is too much, or more appropriately, how little is too little? Do you think you might look back during your last years, and feel like you could have done more with your family, and you don’t really need all that money you have now? The risks of overspending, particularly in the early years of retirement, should be obvious. But what exactly are the risks of underspending? According to an article by Greg Iacurci for CNBC, one big risk is “Not living as fulfilling a life as one could have.”[3] This could mean foregoing a big family trip, that could give your children and grandchildren memories to last a lifetime, because you’re afraid you’re going to run out of money years down the road. Then there’s the issue of inheritance. Many parents hope to leave a certain amount of money to their children and grandchildren when they’re gone. That could be a factor in your calculation. Cutting back on your spending now would likely benefit them later on. But is it worth it? But perhaps there’s another way. How about purchasing some additional life insurance? The right amount of life insurance might make you more comfortable with the idea of living the life you’ve already earned. It’s a straightforward idea: the more life insurance you have, the less you need to worry about your kids’ inheritance. There is data to indicate that underspending is more common than people realize.[4] In a recent study by the Employee Benefit Research Institute, 33 percent of retirees still have 100 percent or more of their initial savings amount remaining by the time they get to their mid-80s.[5] Recent medical developments have complicated the equation. Progress against diseases such as cancer, Alzheimer’s and heart disease could extend all of our lives further than we expected. That is, of course, great news. But it could cause some financial complications. Another approach, advanced by some, is that we need to adjust our spending based on what “phase” of retirement we are in. The argument goes that there are three “phases” of retirement: the “go-go,” the “slow-go” and the “no-go” years.[6] You’re certainly less likely to be travelling the world during your declining years, so chances are you’ll be spending less. It could be a way to justify spending more during the early “go-go” years, although you also need to consider the possibility of increased health care costs during your later “no go” years. So why wouldn’t you spend a little extra while you have the opportunity to enjoy it? The truth is that every situation is different, and there’s no one correct answer. It is possible to spend too little during retirement, but the consequences of spending too much can be far more significant. Perhaps the best you can do is focus on time with your family. Quality time creates lasting memories. That could mean a few vacations to exotic places, but it doesn’t have to be that way. Sometimes a simple visit or gesture can go just as far. The transition to retirement is filled with uncertainty. “Have I saved enough?”, “How long will my savings last?”, “Can I afford to live it up a little bit?” Such questions will likely arise, but you don’t need to go it alone. Your Security Mutual Life insurance agent can help. Your Security Mutual Life insurance agent can augment or help assemble your planning team. They’ll help coordinate with your attorney and tax professional to review your situation and to determine the insurance plan that will best suit your needs and objectives. [1] Allianz Life Insurance Company of North America. “Nearly 2 in 3 Americans Worry More about Running Out of Money than Death.” Allianzlife.com. https://www.allianzlife.com/about/newsroom/2024-Press-Releases/Nearly-2-in-3-Americans-Worry-More-about-Running-Out-of-Money-than-Death (accessed June 9, 2026). [2] Wohlner, Roger. “Living Past 90: How to Play the Long Game on Retirement, Tax Planning.” Thinkadvisor.com. https://www.thinkadvisor.com/2025/03/26/how-to-plan-for-clients-who-might-live-to-90-and-beyond/ (accessed June10, 2026). [3] Iacurci, Greg. “Retirement ‘underspending’ is risky, advisor says. Here’s why.” Cnbc.com. https://www.cnbc.com/2026/06/08/retirement-risk-underspending.html (accessed June 9, 2026). [4] Id. [5] “New EBRI Research Finds Guaranteed Income Streams May Help Retirees Preserve Assets Later in Retirement.” Employee Benefit Research Institute.. https://www.ebri.org/retirement/content/summary/new-ebri-research-finds-guaranteed-income-streams-may-help-retirees-preserve-assets-later-in-retirement (accessed June 9, 2026). [6] Dougan, Scott M. “How to Plan for Retirement’s Go-Go, Slow-Go and No-Go Years.” Kiplinger. https://www.kiplinger.com/retirement/plan-for-retirement-go-go-slow-go-and-no-go-years (accessed June 9, 2026). More SML Planning Minute Podcast Episodes This podcast is brought to you by Security Mutual Life Insurance Company of New York, The Company That Cares®. The content provided is intended for educational and informational purposes only. Information is provided in good faith. However, the Company makes no representation or warranty of any kind regarding the accuracy, reliability, or completeness of the information. The information presented is designed to provide general information regarding the subject matter covered. It is not to serve as legal, tax or other financial advice related to individual situations, because each individual’s legal, tax and financial situation is different. Specific advice needs to be tailored to your situation. Therefore, please consult with your own attorney, tax professional and/or other advisors regarding your specific situation. To help reach your goals, you need a skilled professional by your side. Contact your local Security Mutual life insurance advisor today. As part of the planning process, he or she will coordinate with your other advisors as needed to help you achieve your financial goals and objectives. For more information, visit us at SMLNY.com/SMLPodcast. If you’ve enjoyed this podcast, tell your friends about it. And be sure to give us a five-star review. And check us out on LinkedIn, YouTube and Twitter. Thanks for listening, and we’ll talk to you next time. Tax laws are complex and subject to change. The information presented is based on current interpretation of the laws. Neither Security Mutual nor its agents are permitted to provide tax or legal advice. The applicability of any strategy discussed is dependent upon the particular facts and circumstances. Results may vary, and products and services discussed may not be appropriate for all situations. Each person’s needs, objectives and financial circumstances are different, and must be reviewed and analyzed independently. We encourage individuals to seek personalized advice from a qualified Security Mutual life insurance advisor regarding their personal needs, objectives, and financial circumstances. Insurance products are issued by Security Mutual Life Insurance Company of New York, Binghamton, New York. Product availability and features may vary by state.​ SubscribeApple PodcastsSpotifyAndroidPandoraby EmailTuneInDeezerRSSMore Subscribe Options

    8 min

  2. Jun 23

    10 Commonly Misunderstood Insurance Terms Explained

    10 Commonly Misunderstood Insurance Terms Explained Episode 389 – Sometimes people get confused by all the jargon used in the financial services industry. It’s difficult to understand what you’re buying—or what you already have—if you don’t understand the language being used. Here is a quick listing of ten terms, commonly used in the life insurance industry, that you might not fully understand. More SML Planning Minute Podcast Episodes Transcript of Podcast Episode 389 Hello, this is Bill Rainaldi, with another edition of Security Mutual’s SML Planning Minute. In today’s episode: we explain 10 commonly misunderstood life insurance terms. Sometimes people get confused by all the jargon used in the financial services industry, and life insurance is no exception. It can be difficult to understand what you’re buying—or what you already have—if you don’t understand the language being used. Here is a quick listing of 10 terms, commonly used in the life insurance industry, that are helpful to have a basic understanding of: Underwriting. Before making any sort of offer to you, a life insurance company may need to evaluate your health. For example, life insurance companies generally check to see whether you are a tobacco user or not. A nonsmoker generally has a longer life expectancy than a smoker and thus will often qualify for a better rate and reduce the cost. On the other hand, smoker or not, if you’re in particularly poor health, the company may not be able to offer you coverage at all. Beneficiary. Life insurance policies will usually list a beneficiary. That is the person—or entity—who receives the life insurance policy’s death benefit if the insured dies. Note that any beneficiary designation under a life insurance policy is separate from beneficiary designations in your will. You could leave your entire estate to your children via your will, but if someone else is the beneficiary of your life insurance policy, that person receives the proceeds. The owner of the policy has the right to change the beneficiary (or beneficiaries) as their needs or desires change and it is recommended to review all of your beneficiaries annually or during any change to your planning strategy. Term Life Insurance. Term life insurance is the simplest form of life insurance. You will pay a premium that covers a specific term of years. 10, 20 or 30 years are common terms for one of these policies. If you die during the designated term, your beneficiary will receive the death benefit. It is generally used when you have a temporary need for insurance, such as paying off a mortgage or funding your child’s college education if you’re no longer there. Permanent Life Insurance. Unlike a term policy, permanent life insurance is designed to provide lifetime coverage. With most policies, as long as you pay your premiums, the policy stays in force for life, and the death benefit is guaranteed by the insurance company. It also usually provides a cash value. An example of permanent insurance is whole life insurance. Cash Value. With many permanent life insurance policies such as a whole life insurance policy, part of your premium pays the cost of the death benefit, and part of it goes into an account inside the policy and grows on a tax-deferred basis. As a policyowner, you have the right to access these funds if you wish via loans or withdrawals. The funds could potentially be used for major expenditures or cash emergencies if needed. Dividends. It’s not just your stock portfolio that can pay dividends; your life insurance policy might do so as well. Life insurance dividends are usually associated with mutual life insurance companies such as Security Mutual Life. Dividends are distributed to policyholders from the insurer’s surplus earnings. They are not guaranteed. Grace Period. This is essentially an automatic safety net that exists on every life insurance policy. If you miss a premium payment, you generally have an extra 30 days past the due date before the policy lapses to pay your premium. And, if you die during the grace period, the full death benefit is payable, although there may be a deduction for any missed premium.[1] Paid-Up Additions. Paid-up additions are like miniature life insurance policies within a whole life insurance policy. Each paid-up addition adds a little bit of extra paid-up death benefit and guaranteed cash value to your policy without ongoing premium. Paid-up additions are often created through a whole life policy rider, although if you have a dividend-paying policy, you might be able to choose to take your dividends as paid-up additions. Since paid-up additions are fully paid up portions of death benefit, they can be surrendered for needed cash by the policyowner, or to pay the policy’s premiums, if needed. Doing so will reduce the guaranteed cash value and death benefit.  Accelerated Death Benefit. This allows you to receive a portion of the death benefit while you are still living and is often made available as a rider assigned to specific circumstances such as chronic, critical or terminal illness. It is designed to help provide access to cash for medical bills, nursing care, or other costs associated with the qualifying event. If the advance payout from the life insurance policy is due to terminal illness, it is usually exempt from income taxes.[2],[3] In many circumstances, an accelerated death benefit rider is a simple add-on to a life insurance policy with no separate charge. And finally… Chronic Illness Rider. A chronic illness rider is a type of accelerated death benefit rider that gives you access to part of your death benefit while you are still alive. To take advantage of a chronic illness rider, you need to be certified by a doctor as someone who is ill and not expected to recover. In many cases you will be eligible if you are unable to perform at least two of the six “Activities of Daily Living,” or ADLs, without assistance. These include things like bathing, getting dressed, eating, etc.[4] All these terms can be very confusing. Some may be applicable to you; some may not. The good news is that, if you’re contemplating a new life insurance policy, you don’t need to go it alone. Your Security Mutual Life insurance agent can help. Your Security Mutual Life insurance agent can augment or help assemble your planning team. They’ll coordinate with your attorney and tax professional to review your situation and to determine the insurance plan that will best suit your needs and objectives. [1] Ethos Life. “Understanding the Life Insurance Grace Period.” Ethos.com. https://www.ethos.com/life-insurance/life-insurance-grace-period/ (accessed June 4, 2026). [2] Kagan, Julia. “Understanding Accelerated Benefits in Life Insurance Policies.” Investopedia.com https://www.investopedia.com/terms/a/accelerated-benefits.asp (accessed June 4, 2026). [3] Stimpson, Jeff. “Form 1099-LTC Explained: Long-Term Care and Death Benefits.” https://www.investopedia.com/1099-ltc-form-what-to-know-about-the-1099-ltc-form-4781748 (accessed June 4, 2026). [4] Progressive Insurance. ”What is a life insurance critical or chronic illness rider?” Progressive.com. https://www.progressive.com/answers/critical-chronic-illness-rider/ (accessed June 4, 2026).   More SML Planning Minute Podcast Episodes This podcast is brought to you by Security Mutual Life Insurance Company of New York, The Company That Cares®. The content provided is intended for educational and informational purposes only. Information is provided in good faith. However, the Company makes no representation or warranty of any kind regarding the accuracy, reliability, or completeness of the information. The information presented is designed to provide general information regarding the subject matter covered. It is not to serve as legal, tax or other financial advice related to individual situations, because each individual’s legal, tax and financial situation is different. Specific advice needs to be tailored to your situation. Therefore, please consult with your own attorney, tax professional and/or other advisors regarding your specific situation. To help reach your goals, you need a skilled professional by your side. Contact your local Security Mutual life insurance advisor today. As part of the planning process, he or she will coordinate with your other advisors as needed to help you achieve your financial goals and objectives. For more information, visit us at SMLNY.com/SMLPodcast. If you’ve enjoyed this podcast, tell your friends about it. And be sure to give us a five-star review. And check us out on LinkedIn, YouTube and Twitter. Thanks for listening, and we’ll talk to you next time. Tax laws are complex and subject to change. The information presented is based on current interpretation of the laws. Neither Security Mutual nor its agents are permitted to provide tax or legal advice. The applicability of any strategy discussed is dependent upon the particular facts and circumstances. Results may vary, and products and services discussed may not be appropriate for all situations. Each person’s needs, objectives and financial circumstances are different, and must be reviewed and analyzed independently. We encourage individuals to seek personalized advice from a qualified Security Mutual life insurance advisor regarding their personal needs, objectives, and financial circumstances. Insurance products are issued by Security Mutual Life Insurance Co

    9 min

  3. Jun 16

    Dealing with the Latest Financial Trend: Spending Your Kids’ Inheritance

    Dealing with the Latest Financial Trend: Spending Your Kids’ Inheritance Episode 388 – Financial trends come and go, but the latest, “SKI,” or Spending Kids’ Inheritance, is likely to have a lasting impact. Are you prepared? There are some ways to learn how to “SKI” without getting hurt. More SML Planning Minute Podcast Episodes Transcript of Podcast Episode 388 Hello, this is Bill Rainaldi, with another edition of Security Mutual’s SML Planning Minute. In today’s episode, dealing with the latest financial trend: spending your kids’ inheritance. Have you heard of the latest movement in personal finance? It’s called “SKI,” or “Spending Kids’ Inheritance.” Not surprisingly, it can create conflict across generations. It wasn’t that long ago that people commonly followed the same financial plan: save money during your high earning years, spend carefully during retirement, and leave a decent inheritance for your kids so that they can live a better life than you did. But according to a recent article in Kiplinger, those plans are changing. Rather than focusing on what they’ll eventually leave behind, more people are trying to spend their money while they’re still here to enjoy it. Today, new retirees are spending more on experiences, including “bucket list” travel.[1] In many ways, it’s simply recognizing that your health, longevity and energy levels are going to run out someday, and maybe it’s best to experience some fun while you still have the chance. And it’s having an effect on the travel industry. The trend has become noticeable enough that it’s “beginning to reshape how affluent travelers are spending their money on luxury travel.”[2] It’s understandable why this is happening. As we’ve documented in previous episodes, longevity is on the rise. But there’s also evidence to suggest that healthspans aren’t keeping up. Healthspan can be defined as the number of years a person lives a “healthy, active, disease-free life.”[3] Research by the World Health Organization indicates that there’s a growing disparity between lifespan and healthspan. The average gap between lifespan and healthspan is estimated at approximately 12.5 years in the United States, which is 13 percent higher than it was in the year 2000. In other words, over time, people are gaining extra years of life faster than they are gaining years of good health.[4] Perhaps one other reason for the upswing in SKI is that a surprising number of heirs end up wasting their inheritance. According to a recent survey by Texas Tech University and the University of Alabama, a substantial portion of heirs spend all of their inheritance in the first year. By then, a full 42 percent had seen their net worth drop back to or below what it had been before the inheritance.[5] As one of the authors wrote, “This propensity to immediately spend the entire inheritance is high. In fact, it’s higher than with ANY OTHER type of financial windfall (when controlling for windfall size).” There are certainly some risks built into the SKI trend. For one thing, if you’re not careful, you could easily spend your own retirement savings too quickly and be forced to adjust to a lower standard of living. And so many people underestimate the eventual cost of health care and long-term care. Also, it’s easy to let small upgrades in your lifestyle add up to a much bigger problem later on, a phenomenon known as “lifestyle creep.” Kiplinger goes on to suggest some ideas for how to SKI intelligently. First, you need to set a baseline. Not for what you want to spend, but for what you want to keep. This should help maintain some peace of mind for both you and your heirs.[6] Next, they suggest doing some extra budgeting when it comes to travel. Make travel a specific factor in your overall retirement plan. The author also feels that a bucket list trip doesn’t have to be to an exotic place on the other side of the world. It just has to be meaningful. In the long run, a memorable shared experience while you’re living can have a greater impact than a bigger inheritance.[7] And finally, maybe you can still make some gifts to your heirs from time to time. The belief is that a smaller financial gift, at the right time, can have an oversized impact. So can bringing some of your heirs along with you on some of your trips. The memory might end up being more important than the money.[8] An important question remains, however: how to deal with SKI? There’s one potential solution they fail to mention: life insurance. It’s there to provide that extra cushion. If you’ve got enough of it, you can feel free to spend a good chunk of your kids’ inheritance without much guilt. It’s as if you’ve addressed the inheritance part prior to your retirement spending. Purchasing life insurance, and early, can be one of those instances where you really can get the best of both worlds during your working years and in retirement. And as you probably realize, the older you get, the higher life insurance premiums become. So, the sooner you start, the better. Do you have enough life insurance that your heirs will be OK if you decide to go “Skiing?” Your Security Mutual Life insurance agent can help. Your Security Mutual Life insurance agent will augment or assemble your team and coordinate with your attorney and tax professional to review your situation and to determine the insurance plan that will best suit your needs and objectives. [1] Maddox, Choncé. “The SKI Travel Trend Is Reshaping Retirement Spending.” Kiplinger.com. https://www.kiplinger.com/personal-finance/travel/ski-retirement-travel-trend (accessed April 28, 2026). [2] Kompanik, Noreen. “The SKI trend that’s reshaping travel.” GMtoday.com. https://www.gmtoday.com/travel/the-ski-trend-that-s-reshaping-travel/article_07ca7b72-0eb4-43fc-b8ec-e69fef82a694.html (accessed April 29, 2026). [3] Buckles, Susan. “The global divide between longer life and good health.” Mayoclinic.org. https://newsnetwork.mayoclinic.org/discussion/the-global-divide-between-longer-life-and-good-health/ (accessed April 28, 2026). [4] Borst, Heidi. “Longevity In The U.S.: The Gap Between Lifespan and Health Span.” Forbes.com. https://www.forbes.com/health/wellness/longevity-life-expectancy/ (accessed April 28, 2026). [5] Brin, Dinah Wisenberg. “Heirs Beware: 42% Spend Inheritance Within a Year, Study Finds.” Thinkadvisor.com. https://www.thinkadvisor.com/2026/04/07/heirs-beware-42-spend-inheritance-within-a-year-study-finds/ (accessed April 28, 2026). [6] Maddox, Choncé. “The SKI Travel Trend Is Reshaping Retirement Spending.” Kiplinger.com. https://www.kiplinger.com/personal-finance/travel/ski-retirement-travel-trend (accessed April 28, 2026). [7] Id. [8] Id. More SML Planning Minute Podcast Episodes This podcast is brought to you by Security Mutual Life Insurance Company of New York, The Company That Cares®. The content provided is intended for educational and informational purposes only. Information is provided in good faith. However, the Company makes no representation or warranty of any kind regarding the accuracy, reliability, or completeness of the information. The information presented is designed to provide general information regarding the subject matter covered. It is not to serve as legal, tax or other financial advice related to individual situations, because each individual’s legal, tax and financial situation is different. Specific advice needs to be tailored to your situation. Therefore, please consult with your own attorney, tax professional and/or other advisors regarding your specific situation. To help reach your goals, you need a skilled professional by your side. Contact your local Security Mutual life insurance advisor today. As part of the planning process, he or she will coordinate with your other advisors as needed to help you achieve your financial goals and objectives. For more information, visit us at SMLNY.com/SMLPodcast. If you’ve enjoyed this podcast, tell your friends about it. And be sure to give us a five-star review. And check us out on LinkedIn, YouTube and Twitter. Thanks for listening, and we’ll talk to you next time. Tax laws are complex and subject to change. The information presented is based on current interpretation of the laws. Neither Security Mutual nor its agents are permitted to provide tax or legal advice. The applicability of any strategy discussed is dependent upon the particular facts and circumstances. Results may vary, and products and services discussed may not be appropriate for all situations. Each person’s needs, objectives and financial circumstances are different, and must be reviewed and analyzed independently. We encourage individuals to seek personalized advice from a qualified Security Mutual life insurance advisor regarding their personal needs, objectives, and financial circumstances. Insurance products are issued by Security Mutual Life Insurance Company of New York, Binghamton, New York. Product availability and features may vary by state.​ SubscribeApple PodcastsSpotifyAndroidPandoraby EmailTuneInDeezerRSSMore Subscribe Options

    8 min

  4. Jun 9

    What Exactly Is a Reverse Mortgage?

    What Exactly Is a Reverse Mortgage? Episode 387 – We hear so much talk these days about reverse mortgages. Are they worth looking into? For some people the answer is yes, but only if certain conditions are met. More SML Planning Minute Podcast Episodes Transcript of Podcast Episode 387 Hello, this is Bill Rainaldi, with another edition of Security Mutual’s SML Planning Minute. In today’s episode: so what exactly is a reverse mortgage? It’s hard to miss all the talk these days about reverse mortgages as an income tool for retirees. Some experts like them, some experts don’t. But what are they and how do they work? For many Americans, their biggest asset is the equity they have in their home. Some might not have saved much for retirement. But after years, perhaps decades, of living in the same home, they’ve built up their home equity through appreciation and amortization of their mortgage. When they look at their balance sheets, that becomes their biggest plus. What options do people have if they get to retirement age, have limited retirement savings, and realize that Social Security just isn’t going to be enough? A reverse mortgage is one possible answer. A reverse mortgage is available for homeowners aged 62 and over. It is a way to fund retirement by borrowing against the equity you’ve built up in your home. The more home equity you have, the better. But it’s certainly not for everyone. A reverse mortgage is not the same thing as a home equity line of credit, or HELOC. It’s called a reverse mortgage because instead of you making monthly payments to the bank, the bank makes monthly payments to you. The income you get from a reverse mortgage is generally not taxable. You can use that income as needed to cover monthly expenses, including such things as home maintenance, property taxes, or, if needed, home health care expenses.[1] A reverse mortgage isn’t free. The amount you owe against your house, which includes the principal and accruing interest, increases as you receive your monthly payments. So over time, your home equity decreases. You are essentially trading a little bit of your home equity every month for current income. Note that you typically don’t have to repay the mortgage as long as you continue to use the home as your primary residence. But if you decide to sell your house or move out, the full balance will become due. If you die before you move out, in most cases your executor will sell the home and use the proceeds to pay back the accumulated reverse mortgage debt.[2] Reverse mortgages generally come in three different varieties. The first, and by far the most common, are loans overseen by the Federal Housing Authority. These are known as Home Equity Conversion Mortgages or HECMs. The homeowner has discretion over what to use the funds for, but before closing, they must meet with a counselor approved by the Department of Housing and Urban Development. This one requirement is designed to help curb fraud and abuse. HECMs account for approximately 95 percent of all reverse mortgages.[3] They are more regulated than other types of reverse mortgages and offer some extra protection. For one thing, neither you nor your heirs will ever owe more than the house is worth, even if it goes down in value. And if your lender goes out of business, the federal insurance program guarantees that you will still receive your monthly payments.[4] The maximum you can borrow under the federal program in 2026 is $1,249,125.[5] You will typically need to have at least 50 percent equity in your home (based on appraised value) to qualify. Reverse mortgages typically have adjustable interest rates. Note that the income from a reverse mortgage usually comes in the form of a monthly payment, but that’s not a requirement. It can also be in a lump sum. The two other less common types of reverse mortgages are “single-purpose reverse mortgages,” which are backed by a nonprofit organization or a state or local government, and “proprietary reverse mortgages,” which are offered by private organizations without any government backing. Reverse mortgages have had a somewhat mixed reputation over the years. For one thing, the fees involved can be considerable. A reverse mortgage typically has origination fees, mortgage insurance premiums, closing costs and monthly servicing fees, all of which add up.[6] And there are still some scams out there. Some fraudsters will entice vulnerable seniors with misleading or fraudulent claims. One of those might be when a potential intermediary tries to get you into a reverse mortgage, then uses the money for some sort of “investment opportunity” that they control. They will then typically end up pocketing some of your home’s equity themselves.[7] One way to avoid scams like this is to start with a trusted financial advisor or your current lender. Are there other potential solutions? Of course. The most obvious is, if possible, to save more at an earlier age and allow compound interest to work its magic. But for a lot of people, that’s just not possible. For some people, a reverse mortgage is another option. There are caveats, but this may be a good choice in the right circumstances. A reverse mortgage is not the perfect solution, but for some, depending on their situation, it may be the most viable one. [1] Equifax Life Stages. “What is a Reverse Mortgage and How Does it Work?” Equifax.com. https://www.equifax.com/personal/education/credit/score/articles/-/learn/reverse-mortgage/ (accessed May 19, 2026). [2] Id. [3] Yale, Aly J. “What Is a Reverse Mortgage?” AARP.org. https://www.aarp.org/money/personal-finance/reverse-mortgage-guide/ (accessed May 19, 2026). [4] Id. [5] Johnson, Jamie. “HECM Loan Limits: What They Are and How They Work in 2026.” Themortgagereports.com. https://themortgagereports.com/124868/hecm-loan-limits (accessed May 20, 2026). [6] Miller, Peter G. “Reverse mortgage pros and cons.” Bankrate.com. https://www.bankrate.com/mortgages/reverse-mortgage-pros-and-cons/#cons (accessed May 20, 2026). [7] Goff, Kacie. “Reverse mortgage scams: What they are and how to avoid them.” Bankrate.com. https://www.bankrate.com/mortgages/reverse-mortgage-scams/#common-scams (accessed May 20, 2026). More SML Planning Minute Podcast Episodes This podcast is brought to you by Security Mutual Life Insurance Company of New York, The Company That Cares®. The content provided is intended for educational and informational purposes only. Information is provided in good faith. However, the Company makes no representation or warranty of any kind regarding the accuracy, reliability, or completeness of the information. The information presented is designed to provide general information regarding the subject matter covered. It is not to serve as legal, tax or other financial advice related to individual situations, because each individual’s legal, tax and financial situation is different. Specific advice needs to be tailored to your situation. Therefore, please consult with your own attorney, tax professional and/or other advisors regarding your specific situation. To help reach your goals, you need a skilled professional by your side. Contact your local Security Mutual life insurance advisor today. As part of the planning process, he or she will coordinate with your other advisors as needed to help you achieve your financial goals and objectives. For more information, visit us at SMLNY.com/SMLPodcast. If you’ve enjoyed this podcast, tell your friends about it. And be sure to give us a five-star review. And check us out on LinkedIn, YouTube and Twitter. Thanks for listening, and we’ll talk to you next time. Tax laws are complex and subject to change. The information presented is based on current interpretation of the laws. Neither Security Mutual nor its agents are permitted to provide tax or legal advice. The applicability of any strategy discussed is dependent upon the particular facts and circumstances. Results may vary, and products and services discussed may not be appropriate for all situations. Each person’s needs, objectives and financial circumstances are different, and must be reviewed and analyzed independently. We encourage individuals to seek personalized advice from a qualified Security Mutual life insurance advisor regarding their personal needs, objectives, and financial circumstances. Insurance products are issued by Security Mutual Life Insurance Company of New York, Binghamton, New York. Product availability and features may vary by state.​ SubscribeApple PodcastsSpotifyAndroidPandoraby EmailTuneInDeezerRSSMore Subscribe Options

    8 min

  5. Jun 2

    Should I Turn Down My Inheritance?

    Should I Turn Down My Inheritance? Episode 386 – Why would you ever choose NOT to accept an inheritance? There are a few good reasons. And it’s doable if you decide that’s what you want. More SML Planning Minute Podcast Episodes Transcript of Podcast Episode 386 Hello, this is Bill Rainaldi, with another edition of Security Mutual’s SML Planning Minute. In today’s episode: should I turn down my inheritance? So, a family member has died recently and left some assets to you. You should be happy you’ve been left an inheritance, but it’s complicated. Maybe you’d rather the money went to someone else. Or maybe, for whatever reason, it’s just not worth the trouble. Do you have to accept it? The answer is no. Why would you ever choose not to accept assets that someone has given to you? There are a few situations where it makes sense. One case might be related to federal or state estate taxes. If you’re already a high-net-worth individual who may have an estate tax issue, it may be better to disclaim, assuming your preferred beneficiary is next in line. This is especially true if the next beneficiaries are your children, who are likely to inherit your assets eventually. Why subject the assets to an extra layer of taxation on the way there? Also, inheriting certain assets, such as a traditional IRA, can be very complicated. When you inherit an IRA, unless you’re a surviving spouse, current tax law requires you to withdraw the funds—and pay income taxes along the way—within ten years. If you’re in a high-income tax bracket, you might not end up with as much as you hoped for. The next person in line, who might be in a lower income tax bracket, could end up with more money after taxes. And they may need the income more than you do. One sophisticated strategy some people use is to set up their favorite charity as a secondary beneficiary to their estate. If the IRA owner trusts his or her heirs’ judgment, he or she could leave the IRA to them. They would then figure out whether it makes sense to disclaim the IRA, allowing it to pass to the charity. This could result in considerable income tax savings.[1] Sometimes there are other reasons you might choose to disclaim. The asset could be a rundown piece of real estate with deferred maintenance or environmental issues. In a case like that, you might decide that you just don’t want it. Or maybe you simply don’t need it. That could be a key consideration if the next person in line is your child or someone else you care about. Just keep in mind that it gets tricky if the new inheritor is a minor. Minors are considered legally incapable of owning assets directly, so they generally can’t assume control or management of inherited assets. A court-appointed legal guardianship may be required.[2] So, what happens if you decide the answer is “no, thanks?” You would then need to file what’s called a “qualified disclaimer.” If you do it properly, the assets pledged to you will be passed along to the next person in line. Although every state and every situation is different, here are some generic rules you might need to follow:[3] The disclaimer must be in writing. It also needs to be irrevocable and without any qualifications. Once you decide to disclaim, you can’t change your mind. Also, you’re not allowed to make it contingent on something else happening or not happening. The disclaimer must be made before you accept the assets. You can’t give them back once you have them. It must be made in a timely manner. You generally need to submit the disclaimer within 9 months. However, there is an exception if the beneficiary is under age 21. In that case, the deadline is nine months after they reach age 21.[4] The disclaimer also needs to be unlimited. You’re not going to be able to attach any conditions to the disclaimer. Note that it is also possible to execute a partial qualified disclaimer, but it can be tricky. For example, if you’re scheduled to receive a certain number of shares in a publicly traded company, you may be able to keep a selected percentage of those shares while disclaiming the rest.[5] It’s important to understand that a qualified disclaimer has its limitations. Maybe the most important of those is that you have to completely give up any right to the disclaimed assets. In other words, if you say no, you don’t get to choose what happens next. You’ll need to look closely to see where the money will end up if you disclaim. You might prefer that your children be next in line, but it’s not your choice. If it’s actually your long-lost cousin Ethel, that could also be a factor in your decision. It’s not often that people are in a position to decline inherited assets. But in certain situations, it’s nice to know that it can be done, if it makes sense. [1] Saunders, Laura. “When Heirs Are Right to Say ‘Thanks but No Thanks’ to an Inheritance.” The Wall Street Journal. https://www.wsj.com/personal-finance/taxes/when-heirs-are-right-to-say-thanks-but-no-thanks-to-an-inheritance-5ea96aac?mod=Searchresults&pos=1&page=1 (accessed May 11, 2026). [2] Trust & Will. “Minors Inheriting Assets: Limitations and Considerations.” Trust&will.com. https://trustandwill.com/learn/minors-inheriting-assets (accessed May 11, 2026). [3] Hartnett, Stephen C., J.D., LL.M. “Qualified Disclaimers.” Aaepa.com. https://www.aaepa.com/2014/03/disclaimers/ (accessed May 11, 2026). [4] TaxNotes. “Sec. 25.2518-2 Requirements for a qualified disclaimer.” TaxNotes.com. https://www.taxnotes.com/research/federal/cfr26/25.2518-2 (accessed May 11, 2026). [5] National Archives Code of Federal Regulations. “§ 25.2518-3 Disclaimer of less than an entire interest.” Ecfr.gov. https://www.ecfr.gov/current/title-26/chapter-I/subchapter-B/part-25/subject-group-ECFRac39af22636eabc/section-25.2518-3 (accessed May 11, 2026). More SML Planning Minute Podcast Episodes This podcast is brought to you by Security Mutual Life Insurance Company of New York, The Company That Cares®. The content provided is intended for educational and informational purposes only. Information is provided in good faith. However, the Company makes no representation or warranty of any kind regarding the accuracy, reliability, or completeness of the information. The information presented is designed to provide general information regarding the subject matter covered. It is not to serve as legal, tax or other financial advice related to individual situations, because each individual’s legal, tax and financial situation is different. Specific advice needs to be tailored to your situation. Therefore, please consult with your own attorney, tax professional and/or other advisors regarding your specific situation. To help reach your goals, you need a skilled professional by your side. Contact your local Security Mutual life insurance advisor today. As part of the planning process, he or she will coordinate with your other advisors as needed to help you achieve your financial goals and objectives. For more information, visit us at SMLNY.com/SMLPodcast. If you’ve enjoyed this podcast, tell your friends about it. And be sure to give us a five-star review. And check us out on LinkedIn, YouTube and Twitter. Thanks for listening, and we’ll talk to you next time. Tax laws are complex and subject to change. The information presented is based on current interpretation of the laws. Neither Security Mutual nor its agents are permitted to provide tax or legal advice. The applicability of any strategy discussed is dependent upon the particular facts and circumstances. Results may vary, and products and services discussed may not be appropriate for all situations. Each person’s needs, objectives and financial circumstances are different, and must be reviewed and analyzed independently. We encourage individuals to seek personalized advice from a qualified Security Mutual life insurance advisor regarding their personal needs, objectives, and financial circumstances. Insurance products are issued by Security Mutual Life Insurance Company of New York, Binghamton, New York. Product availability and features may vary by state.​ SubscribeApple PodcastsSpotifyAndroidPandoraby EmailTuneInDeezerRSSMore Subscribe Options

    8 min

  6. May 26

    Careless Spending Can Erode Income Gains Revisited

    Careless Spending Can Erode Income Gains Revisited Episode 385 – If your income goes up over time, it doesn’t necessarily mean that you’ll be able to save more. If you’re not careful, “lifestyle creep” can make things worse. Here are a few ideas on how to fight back against lifestyle creep. More SML Planning Minute Podcast Episodes Transcript of Podcast Episode 385 Hello this is Bill Rainaldi, with another edition of Security Mutual’s SML Planning Minute. In today’s episode, we take a look back at one of our favorite previous episodes, careless spending can erode income gains. It may be counterintuitive, but sometimes doing better financially can do more harm than good to your savings. This is due to a phenomenon known as lifestyle creep. Lifestyle creep, sometimes referred to as “lifestyle inflation,” occurs when your spending increases as your income rises, turning yesterday’s luxuries into today’s necessities. Without realizing it, this slow increase in expenses can make it difficult to save money and reach your financial goals. Increases in online shopping, subscription services and food delivery can all be indicators of lifestyle creep.[1] The result is that, in spite of your improved income, you begin saving and investing less and less. What can you do if you see this happening to you? Here are a few ways to resist the impulse spending that comes with lifestyle creep: Use a “buy list.” Resist the impulse to purchase something by instead creating what’s called a “buy list.”[2] Put the thing you want to buy on that list. Then, after a designated period of time, say ten days or so, if you still feel like you want it, go ahead and make the purchase.[3] Set up an automatic investment plan. In other words, pay yourself first. You can get money automatically transferred every month from your checking account to a mutual fund or a savings account. Or your employer might also be able to deposit a portion of your paycheck directly into your savings or investment account, or into a cash value life insurance policy. The idea is to save the money before you have a chance to spend it. Realize that there may be emotional reasons for lifestyle creep. Sometimes it’s jealousy or personal insecurity that leads us to spend more.[4] If you see this happening, it may be time to think about the things that influence you and how to change them. For example, you may want to spend more time with people who really appreciate you.[5] Also, social media doesn’t help. People tend to want to live like others they see online.[6] Perhaps a social media budget or social media vacation can help. If you don’t have a budget, maybe it’s time to get one. One of the most basic ways to do this is to simply set some limits. Decide how much to spend on discretionary items and find a way to stick to it. Make sure you carefully track your spending. Numerous online budgeting tools can help. Also, be sure to review the plan regularly to see how you’re doing and adjust if needed. Become an educated consumer. There may be cheaper options for expensive stuff or experiences. You just have to look around. Perhaps a used item can give you the same satisfaction as a new one. Think carefully if you get a bonus at work. If you get a bonus, it may be a good idea to put it directly towards your savings, so it’s already out of sight and out of mind. Audit your spending. If you take a serious look, you may find some extra things that have sneaked into your spending habits. Are they necessities? If not, it may be time to cut back. Every dollar counts! If your income goes up over time, it doesn’t necessarily mean that you’ll have more money in your savings or checking accounts. Very often it does, but if you’re not careful, lifestyle creep can kill any progress towards your financial goals or even make things worse. The best way to deal with this is up to you, but careful planning and simply thinking through your spending is a good start. This doesn’t mean that you’re never going to splurge. There’s no need to get too worried about small, infrequent, indulgences.[7] Focus on the bigger picture. [1] Tam, Ruth and Aslam, Michelle. “If your spending is eating your savings, you might be experiencing ‘lifestyle creep’.“ NPR.org. https://www.npr.org/2022/07/13/1111300716/lifestyle-creep-definition (accessed March 10, 2025). [2]  Id. [3] Id. [4]  Id. [5] Id. [6] Gould, Wendy. “The Seductive Trap of the Lifestyle Creep.” Verywellmind.com. https://www.verywellmind.com/lifestyle-creep-8667848 (accessed March 14, 2025). [7] Tam, Ruth and Aslam, Michelle. “If your spending is eating your savings, you might be experiencing ‘lifestyle creep’.“ NPR.org. https://www.npr.org/2022/07/13/1111300716/lifestyle-creep-definition (accessed March 10, 2025). More SML Planning Minute Podcast Episodes This podcast is brought to you by Security Mutual Life Insurance Company of New York, The Company That Cares®. The content provided is intended for educational and informational purposes only. Information is provided in good faith. However, the Company makes no representation or warranty of any kind regarding the accuracy, reliability, or completeness of the information. The information presented is designed to provide general information regarding the subject matter covered. It is not to serve as legal, tax or other financial advice related to individual situations, because each individual’s legal, tax and financial situation is different. Specific advice needs to be tailored to your situation. Therefore, please consult with your own attorney, tax professional and/or other advisors regarding your specific situation. To help reach your goals, you need a skilled professional by your side. Contact your local Security Mutual life insurance advisor today. As part of the planning process, he or she will coordinate with your other advisors as needed to help you achieve your financial goals and objectives. For more information, visit us at SMLNY.com/SMLPodcast. If you’ve enjoyed this podcast, tell your friends about it. And be sure to give us a five-star review. And check us out on LinkedIn, YouTube and Twitter. Thanks for listening, and we’ll talk to you next time. Tax laws are complex and subject to change. The information presented is based on current interpretation of the laws. Neither Security Mutual nor its agents are permitted to provide tax or legal advice. The applicability of any strategy discussed is dependent upon the particular facts and circumstances. Results may vary, and products and services discussed may not be appropriate for all situations. Each person’s needs, objectives and financial circumstances are different, and must be reviewed and analyzed independently. We encourage individuals to seek personalized advice from a qualified Security Mutual life insurance advisor regarding their personal needs, objectives, and financial circumstances. Insurance products are issued by Security Mutual Life Insurance Company of New York, Binghamton, New York. Product availability and features may vary by state.​ SubscribeApple PodcastsSpotifyAndroidPandoraby EmailTuneInDeezerRSSMore Subscribe Options

    7 min

  7. May 19

    Are You Sure You Want to Be an Executor?

    Are You Sure You Want to Be an Executor? Episode 384 – Being named as an estate executor is often considered an honor, and you will be compensated for your efforts. But is it worth all the potential trouble? More SML Planning Minute Podcast Episodes Transcript of Podcast Episode 384 Hello, this is Bill Rainaldi, with another edition of Security Mutual’s SML Planning Minute. In today’s episode: are you sure you want to be an executor? Perhaps you should consider it an honor. Your Uncle Charlie, who always liked, trusted and respected you, has named you as the executor of his will. What does that even mean? The executor of an estate is the person (or, sometimes an entity) appointed to manage the financial affairs of a deceased individual and to carry out their wishes as outlined in their will. The executor is usually a family member, but it can also be a close friend, financial advisor or family lawyer. It can also be a financial institution. And sometimes there’s more than one. So, what does an executor do? Here are some of the early steps many executors take: obtaining copies of the death certificate and filing a copy of the will with the probate court where the deceased lived. Before the court approves the executor, they may schedule a hearing to give interested parties a chance to either contest the will or object to the appointment of the executor.[1] Once approved, the executor generally needs to notify the appropriate parties of the decedent’s death. This may include friends and family members, financial institutions and government agencies, such as the Social Security Administration. Then they usually need to gather all the estate’s assets and liabilities. After that, the executor will need to settle any debts or taxes before the assets can be distributed. Once all this is done, they will supervise the distribution of the assets.[2] It sounds complicated, and it very often can be. It typically takes three to six months, but it can be much longer, sometimes as long as two years or more.[3] [4] And it could involve a major time commitment on the executor’s part. Also, the amount of paperwork can be overwhelming. Here’s one good reason to say yes: executors usually get paid. However, for small and modest sized estates where family members act as executor, this is often done free of charge.  In larger and more complicated estates, the rate is typically set by state law, with a normal rate of anywhere between 2 and 5 percent of the total estate value.[5] In many cases the rate will be calculated on a sliding scale based on the value of the estate. In New York, for example, the fee is 5 percent for estates below $100,000, gradually dropping down to 2 percent for estates of more than $5 million. Two percent of $5 million is $100,000. Things can sometimes get tricky for an executor. In most states, the executor can also be a beneficiary of the estate.[6] This has the potential to create a conflict of interest, if not conflict with the other beneficiaries. The entire process can be overwhelming for some. It’s important to remember that even though it may be an honor, you don’t have to accept it. Another alternative might be to accept the assignment but hire some professionals to help you out.[7] And people do sometimes turn down the opportunity to serve as an executor, despite any personal or financial incentives. Potential family conflicts are sometimes enough to scare someone off. For example, the decedent might own a house that is scheduled to be split among his children. But what happens if one of them is already living there? The executor may have to notify the resident that he or she must move out so that the property can be sold. It may carry some prestige, but acting as the executor can often put them in the middle of disagreements between some of the heirs over the distribution of assets. If you’re a family member or friend, being an executor can cause irreparable damage to your personal relationships, and that’s one of the big reasons people sometimes opt out. It’s also important to recognize that an executor is considered a fiduciary for the estate and its beneficiaries. This is a high ethical standard where, if the executor does something wrong or enriches him or herself unjustly, they can be sued personally. The potential for personal liability may be enough of a reason to reject the nomination, particularly in large or complicated estates. Finally, note that things can get even more complicated if the individual does not have a will. In that case, the court will appoint someone to be the administrator of the estate. That’s basically the same job as the executor, but with a court-appointed individual who may or may not have known the decedent. If you’re the one who’s doing your own estate planning, putting together the will—with the help of a qualified estate planning attorney—is a good start. You’ll need to think seriously about who you want as your executor. Just as important, you need to communicate early and openly about your decisions with everyone involved. And be sure to revisit your choice every few years. [1] MetLife. “Executor of Estate: What Do They Do?” MetLife.com. https://www.metlife.com/stories/legal/executor-of-estate/ (accessed April 16, 2026). [2] Id. [3] American Wills & Estates. “How Long Does Probate Take and How Much Does it Cost?” Americanwillsandestates.com https://americanwillsandestates.com/blog/how-long-does-probate-take-and-how-much-does-it-cost/ (accessed April 16, 2026). [4] Beck, Lenox & Stolzer. “How Long Does It Take to Distribute Assets and Close an Estate?” Beckelderlaw.com. https://beckelderlaw.com/how-long-does-it-take-to-distribute-assets-and-close-an-estate/# (accessed April 16, 2026). [5] The Olear Team. “Executor of estate fees: How much is paid, and when?” Olear.com. https://olear.com/executor-estate-fees-much-paid/#:~:text=What%20are%20executor%20of%20estate,executor%20fee%20is%202%20percent (accessed April 16, 2026). [6] MetLife. “Executor of Estate: What Do They Do?” MetLife.com. https://www.metlife.com/stories/legal/executor-of-estate/ (accessed April 16, 2026). [7] Miura, Danielle. “Your client is the executor. Now what?” Insurancenewsnet.com. https://insurancenewsnet.com/innarticle/your-client-is-the-executor-now-what (accessed April 16, 2026). More SML Planning Minute Podcast Episodes This podcast is brought to you by Security Mutual Life Insurance Company of New York, The Company That Cares®. The content provided is intended for educational and informational purposes only. Information is provided in good faith. However, the Company makes no representation or warranty of any kind regarding the accuracy, reliability, or completeness of the information. The information presented is designed to provide general information regarding the subject matter covered. It is not to serve as legal, tax or other financial advice related to individual situations, because each individual’s legal, tax and financial situation is different. Specific advice needs to be tailored to your situation. Therefore, please consult with your own attorney, tax professional and/or other advisors regarding your specific situation. To help reach your goals, you need a skilled professional by your side. Contact your local Security Mutual life insurance advisor today. As part of the planning process, he or she will coordinate with your other advisors as needed to help you achieve your financial goals and objectives. For more information, visit us at SMLNY.com/SMLPodcast. If you’ve enjoyed this podcast, tell your friends about it. And be sure to give us a five-star review. And check us out on LinkedIn, YouTube and Twitter. Thanks for listening, and we’ll talk to you next time. Tax laws are complex and subject to change. The information presented is based on current interpretation of the laws. Neither Security Mutual nor its agents are permitted to provide tax or legal advice. The applicability of any strategy discussed is dependent upon the particular facts and circumstances. Results may vary, and products and services discussed may not be appropriate for all situations. Each person’s needs, objectives and financial circumstances are different, and must be reviewed and analyzed independently. We encourage individuals to seek personalized advice from a qualified Security Mutual life insurance advisor regarding their personal needs, objectives, and financial circumstances. Insurance products are issued by Security Mutual Life Insurance Company of New York, Binghamton, New York. Product availability and features may vary by state.​ SubscribeApple PodcastsSpotifyAndroidPandoraby EmailTuneInDeezerRSSMore Subscribe Options

    8 min

  8. May 12

    The Latest on Wealth Taxes

    The Latest on Wealth Taxes Episode 383 – The concept of a wealth tax—applying a tax to the value of someone’s assets—has become popular in some state legislatures in the last few years. Are they likely to catch on anytime soon? More SML Planning Minute Podcast Episodes Transcript of Podcast Episode 383 Hello, this is Bill Rainaldi, with another edition of Security Mutual’s SML Planning Minute. In today’s episode: the latest on wealth taxes. Public budget concerns seem to be everywhere, and state governments are no exception. The problem has gotten worse in the past few years because, in some cases, states would like to continue programs that were started with federal COVID spending that has since run out.[1] So, what’s left for a state to do? Some are taking a look at so-called “wealth taxes” as a way to raise revenue. The appeal of wealth taxes is that, in theory, a state government can raise significant sums of money while affecting only a small slice of its population. A wealth tax takes a completely different approach from a sales, income or estate tax. It’s a tax imposed on someone’s net worth, that is, the total market value of their assets minus liabilities.[2] Here’s an example. Let’s say there’s a two percent wealth tax on individuals with a net worth above $100 million in a particular state. If you’re lucky enough to have a net worth of $1 billion, you would pay on the difference of $900 million, resulting in a tax bill of $18 million. Some proposed wealth taxes are written to occur annually while others are written as a one-time levy. One of the arguments in favor of wealth taxes is that they could raise a significant amount of revenue for the individual states. Another is that they would make the tax system more progressive and thus lessen the effects of income inequality. Some studies have indicated that income inequality has risen in the United States in recent years.[3] But there are also some notable arguments against the use of wealth taxes, particularly at the state level. For one thing, individual mobility would likely work against them. In other words, a high-income individual facing a wealth tax can simply move to another state to avoid it. There is evidence to suggest that a high tax burden can prompt some people to relocate. For example, after decades of growth, California, the state with the highest maximum income tax rate at 13.3 percent, has led the nation in net out-migration for six consecutive years, according to a 2026 report.[4] Critics suggest that more recent developments in California could make matters worse. The state is now considering a referendum that, if approved, would impose a one-time five percent wealth tax on state residents with a net worth of $1 billion or more. Advocates are currently gathering signatures in an effort to get the proposed tax on the ballot in 2026.[5] There is anecdotal evidence that some California billionaires have left the state out of fear that the proposal will become law, among them Larry Page, Sergey Brin and Mark Zuckerberg.[6] Other states, such as Illinois, Maryland and Washington have all introduced wealth tax legislation, although the final outcome remains uncertain in each state.[7] There are still unanswered questions about how a wealth tax would work. Conceptually, a wealth tax is based on the value of your assets, rather than the income you receive from them. This is different from, for example, capital gains taxes, which only become payable when you sell the asset. What happens if you pay a wealth tax one year—without selling the assets—and then the value of those assets goes down the next year? Would you get a refund? The answer seems to be no. At the federal level, the question of whether a wealth tax is permitted under the U.S. Constitution is a matter of intense legal debate. The federal income tax began in 1913 after the 17th Amendment was passed to specifically authorize it.[8] Many experts believe that a federal wealth tax would not currently pass a constitutional challenge, and it would likely take another amendment before it is allowed.[9] At the state level, each one of them has its own constitution, and they’re all different. There are potential legislative, constitutional and practical obstacles that could end up being too big to handle. Only time will tell whether the states will be able to collect the bonanza they’re hoping for. [1] Finseca. “Finseca Policy 02/24/26: State Wealth Tax Blitz & US Deficit Updates.” Finseca.org. https://www.finseca.org/finseca-policy-02-24-26-state-wealth-tax-blitz-us-deficit-updates/ (accessed April 13, 2026). [2] Peter G. Peterson Foundation. “What Is a Wealth Tax, and Should the United States Have One?” Pgpf.org. https://www.pgpf.org/article/what-is-a-wealth-tax-and-should-the-united-states-have-one/ (accessed April 13, 2026). [3] Cunningham, Mary. “Wealth inequality in America just hit its widest gap in more than 3 decades.” CBSNews.com. https://www.cbsnews.com/news/us-wealth-gap-widest-in-three-decades-federal-reserve/ (accessed April 13, 2026). [4] Christopher, Nilesh. “California’s exodus isn’t just billionaires — it’s regular people renting U-Hauls, too.” The Los Angeles Times. https://www.latimes.com/business/story/2026-01-08/californias-exodus-isnt-just-billionaires-its-regular-people-renting-u-hauls-too (accessed April 13, 2026). [5] BDO USA, P.C. “California’s Billionaire Tax Proposal Would Allow Sweeping, One-Time Taxation Based on Net Worth.” BDO.com. https://www.bdo.com/insights/tax/californias-billionaire-tax-proposal-would-allow-sweeping-one-time-taxation-based-on-net-worth (accessed April 13, 2026). [6] Perman, Stacy. “Inside the exodus of California tech billionaires to Florida.” The Los Angeles Times. https://www.latimes.com/entertainment-arts/business/story/2026-03-11/inside-exodus-of-california-tech-billionaires-to-florida (accessed April 13, 2026). [7] Finseca. “Finseca Policy 02/24/26: State Wealth Tax Blitz & US Deficit Updates.” Finseca.org. https://www.finseca.org/finseca-policy-02-24-26-state-wealth-tax-blitz-us-deficit-updates/ (accessed April 13, 2026). [8] Bishop-Henchman, Joe. “Is a Wealth Tax Constitutional?” Ntu.org. https://www.ntu.org/foundation/detail/is-a-wealth-tax-constitutional (accessed April 13, 2026). [9] Id. More SML Planning Minute Podcast Episodes This podcast is brought to you by Security Mutual Life Insurance Company of New York, The Company That Cares®. The content provided is intended for educational and informational purposes only. Information is provided in good faith. However, the Company makes no representation or warranty of any kind regarding the accuracy, reliability, or completeness of the information. The information presented is designed to provide general information regarding the subject matter covered. It is not to serve as legal, tax or other financial advice related to individual situations, because each individual’s legal, tax and financial situation is different. Specific advice needs to be tailored to your situation. Therefore, please consult with your own attorney, tax professional and/or other advisors regarding your specific situation. To help reach your goals, you need a skilled professional by your side. Contact your local Security Mutual life insurance advisor today. As part of the planning process, he or she will coordinate with your other advisors as needed to help you achieve your financial goals and objectives. For more information, visit us at SMLNY.com/SMLPodcast. If you’ve enjoyed this podcast, tell your friends about it. And be sure to give us a five-star review. And check us out on LinkedIn, YouTube and Twitter. Thanks for listening, and we’ll talk to you next time. Tax laws are complex and subject to change. The information presented is based on current interpretation of the laws. Neither Security Mutual nor its agents are permitted to provide tax or legal advice. The applicability of any strategy discussed is dependent upon the particular facts and circumstances. Results may vary, and products and services discussed may not be appropriate for all situations. Each person’s needs, objectives and financial circumstances are different, and must be reviewed and analyzed independently. We encourage individuals to seek personalized advice from a qualified Security Mutual life insurance advisor regarding their personal needs, objectives, and financial circumstances. Insurance products are issued by Security Mutual Life Insurance Company of New York, Binghamton, New York. Product availability and features may vary by state.​ SubscribeApple PodcastsSpotifyAndroidPandoraby EmailTuneInDeezerRSSMore Subscribe Options

    7 min
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About

SML Planning Minute shares concise and entertaining financial ideas, for individuals, families, and business owners.

Information

  • Creator
    Security Mutual Life Advanced Markets Team
  • Years Active
    2018 - 2026
  • Episodes
    150
  • Rating
    Clean
  • Copyright
    © Security Mutual Life Insurance Company of New York • All rights reserved
  • Show Website
    SML Planning Minute

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