Help Your Client Retire On-Time Using Indexed ULJulie Brooks
Many Americans have the goal of retiring at age 65. It’s assumed that at that age, one will have worked long enough to have sufficient assets which can provide income over the rest of your life.
If your client’s primary source of funds for retirement income is a 401(k) plan, they could be facing a harsh reality when it comes time to retire.
401(k) plans are generally exposed to market volatility and are taxable as ordinary income upon distribution. If a client’s investments are down in the years just prior to retirement, they may find themselves needing to work longer to fund their retirement while hoping that their investment allocations turnaround and provide a positive return.
If a 401(k) plan is only one component of your client’s diversified retirement plan, then this may not be as big of a concern. But if they are banking on that 401(k) to take care of them and their family after their working career, they may want to consider using an Indexed Universal Life policy to protect against downturns in the market.
Above the match
For those who have a company match, it makes sense to contribute to the max that a company is willing to match. Any funds that would normally contribute to a 401(k) above the match can be directed into an Indexed UL policy. This will allow clients to protect themselves against negative returns since the product has a floor rate which ensures that they will never lose a single penny of their accumulated value.
With caps on the interest credited around 12% they still have substantial potential to grow their retirement fund and provide a tax free income for life. This strategy also protects loved ones in the event of a premature death. If your client were to pass away before retirement, their beneficiary would receive a tax-free lump sum death benefit from the Life Insurance policy.
If you have clients who are contributing to their 401(k) plan without a company match or if they are contributing funds above and beyond their company match, this concept could help them protect their accumulated account values and retire on-time.
Contact us today to find out how much income you can help generate for your client‘s retirement while protecting their accumulated funds from market downturns.