Sequence of Returns

There are several factors that will affect your ability to retire comfortably. Outliving one’s income is a primary concern of many Americans. There are several factors that can impact how long your money will last during your retirement years. Such as:

  1. Market Volatility
  2. Diversified Sources of Income
  3. Flexibility
  4. Risk Management
Retirement Finance Calculators

Mitigating Market Risk During Retirement with Life Insurance

Market performance in the earliest years can make or break a client’s long-term retirement. But, with cash value life insurance, clients can take available withdrawals during down-market years to help preserve their assets.

Indexed Universal Life Insurance allows you to participate in part of a market’s upside, but protects your downside risk. Although the crediting rate an IUL policy is usually subject to a cap on its return, unlike the market, there is a floor through which the policy’s crediting rate cannot fall. As a result, the owner participates in the market upside but the risk during a downturn is mitigated. This adds a stabilizing element to the policy.

Retirement Challenges

The ideal client is typically saving a significant amount in retirement funds and have built up a rather large account balance. They are also concerned about stock market volatility and how this will affect their ability to not outlive their retirement funds. 

Demographics

  • Max age of 60
  • Budget/Premium: $10,000+ (The older the client, the greater the minimum)
  • Income: $100,000-$500,000
  • Concerned about stock market volatility
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The participant establishes a life insurance policy on his or her own life. The policy will typically be funded by reducing the amount they are saving into their retirement account and diverting it to the indexed life policy.

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During the accumulation phase of the policy the client has access to the funds as needed. We recommend review the performance yearly.

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If the client would like to change premiums this can be accomplished but we recommend requesting an in-force illustration.

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The client takes their retirement income from their investment accounts. Rather than taking retirement income out of their investment account they will take it from the life insurance policies, improving the performance of their investment portfolio.

How Advisor’s Resource Can Help

Planning for the future financial security for your clients and their heirs requires thought. We work with you to establish both loan design and a funding strategy. If this situation sounds familiar, you more than likely have clients that are a perfect match for our Sequence of Returns strategy. Let’s work together to determine the best strategies to improve your client’s financial situation