With the extreme market volatility over the past year, many advisors are beginning to discuss what I have been educating my clients on for years. Families with balanced assets in retirement will be much more successful (success means keeping and spending more of your own money). Retiring in a bear market is always concerning for clients whose assets are 100% at market risk. Unfortunately, most clients are 100% at risk. They are 100% at market and tax risk because traditional financial planning has told them to max fund their 401ks or retirement accounts, pay off their house as quickly as possible, and invest in the stock market with your savings. Families that have followed this advice are very challenged in volatile and bear markets. Traditional financial planning is failing!
I have been teaching my clients how to become financially efficient and prosperous for almost 10 years. I show them the value of balance; balance in stock market risk and taxes. If you have assets at stock market risk, you should balance your portfolio with assets that have guarantees. If you have assets that are 100% taxable, you should have assets that are 100% invisible, legally, to the government for income tax purposes. I teach my families to balance their portfolios with properly structured, whole life insurance policies.
A properly structured, whole life insurance policy has significant benefits that will provide value to families all through their lives, including retirement. When a whole life policy is structured correctly, the family receives all the following living benefits: liquidity, guarantees, always compounding, tax-deferred accumulation, tax free withdrawals, college financial-aid invisible, good rate of return and flexible loan options. And yes, there is a permanent death benefit that is guaranteed to outlast you.
Most financial advisors and brokers do not understand this product and therefore don’t recommend or discuss this type of asset. This is so sad because there is no other investment vehicle that can offer all the benefits that this single product can. Now, because of the volatility and fear of a bear market and the failed financial plans of so many families following “traditional financial planning”, whole life is back (whole life has been around for over 150 years) and on the rise in popularity.
This month in the Wall Street Journal article, “How to Retire in a Bear Market; March 7th 2016”; the first suggestion for surviving retirement is to tap an asset that is completely uncorrelated to the stock market like cash inside a whole life policy. Did you hear that…The # 1 way to survive retirement in a bear market is to have cash in a whole life policy! AMEN!!
The sooner/younger you can add a properly structured, whole life policy to your portfolio, the more life benefits you will receive. Finding a financial expert that understands the functionality of whole life and how to structure it properly so you can reap all the benefits is vitally important. Adding a properly structured, whole life policy is the single most beneficial step to surviving retirement in a bear market!