It’s certainly no surprise that people of all generations in our country nowadays are concerned about retirement planning. At a time, when the overall economy is pretty weak, the stock market is artificially inflated and violatile, and the job market still not back on track, people need some stability. Social security was never meant to provide full retirement benefits, only supplement retirement savings. The statistics are staggering, showing that half of our country is not currently saving anything for retirement and/or have no retirement savings. With 1 in 5 people in the United States being 55+ by the year 2030, it’s imperative we all take a hard look at proper retirement planning.
Our main goal when helping clients and prospects with retirement planning, is to create multiple streams of income. We have already talked about the benefits of income annuities, the only financial product in the market today that provides a guaranteed income for life. Another important financial tool that can’t be overlooked is equity indexed universal life insurance. Most consumers think of life insurance strictly to provide a death benefit, but indexed universal life insurance kills two birds with one stone. When structured properly this type of policy provides a death benefit, but is designed to build cash value quickly as well. The cash value can be pulled in case of an emergency, or to supplement retirement income. The biggest benefit is that the cash value funds can be taken out tax free. The burden of high taxes on retirees is important to consider, especially if all of your current investments are in tax-deferred vehicles. This type of vehicle allows you to diversify, so that not all of your retirement income is taxed the same way.
Another major benefit of indexed universal life is that the policies are structured so that policy values are not affected by negative stock market returns, which means that if the Dow Jones for example is down 15% one year, the lowest you can have credited to your account is 0. Some policies have a minimum of a 2% gain, no matter how low the market goes. On the flip side, the gains are typically capped at 13%-17%, depending on the product and insurance carrier. This means that if the market gains 20% one year, you would be credited up to the capped amount. This is the trade off for the guarantee of not having negative returns applied in the down years.
If you are interested in creating multiple streams of income for a comfortable financial retirement, please contact us today. As an independent insurance agency in Sarasota, Florida, we are not tied to any one company. We have access to as many as 100 life insurance companies, ensuring the best plans and products for our clients.
LionShare Insurance Group