Certainty of Money

May 4, 2020 | Blog, Featured, Insurance | 0 comments

The certainty of money in the future creates a world in which we can behave very differently now.   Let’s take a look at a simple example.   Imagine that you were entitled to a $500K bonus from your company, but the caveat is that it would not be paid out for 5 years.  Would you behave differently now, knowing this deferred financial guarantee existed?  Would you travel more?  Buy a cottage?  Upgrade your vehicle?  Upgrade your house?  Would you not worry as much about paying down the mortgage or taking on additional mortgage debt?

This is exactly how life insurance can work for you in retirement.  With a properly structured cash value insurance plan you’re free to spend down other assets, have greater income, pay less tax, and enjoy retirement with a whole lot more mullah.  You can exhaust your RSP savings sooner.  Take a mortgage on the cottage.  All the while enjoying a higher income and knowing that the life insurance will replace those assets when you are gone.

Owning permanent cash value life insurance opens up financial strategies that would otherwise not be available.   As a result, retirement income can be significantly enhanced.  Guaranteed life annuities, Access to cash values, reverse mortgages, and spending down other assets are just some of the ways you can significantly improve retirement cash flow.

1.  More Money

In our retirement years our aversion to risk and risky assets becomes much greater.    Yet we are often unhappy with the poor returns on fixed income investments like GICs.  When markets are volatile withdrawals could deplete our nest egg at an alarming rate leaving us in dire circumstances where we must either take a drastically lower income from our savings or live with the constant worry of running out of money.

Fixed income annuities are a very attractive solution but consumers are hesitant knowing the income ends when a person dies.  Permanent cash value insurance is like the permission slip to buy the annuity knowing that the capital is replaced on death.  The annuity can give more money in retirement with zero market volatility risk.  If you think you worry about your investment portfolio now, imagine what it will be like at 70 when you depend on it to live.  Guaranteed income really starts to have more appeal the older we get.

The strategy is always to provide a wealth plan that can guarantee lifetime retirement income, no matter how long you live.  When insurance is combined with retirement funds, you can enjoy greater income with less risk and provide for heirs at the same time.

2.  Cash Values as a Storage of Wealth

Life insurance a very effective way to both grow and store wealth.  Its so attractive because it grows tax free and in retirement can be accessed tax free as well.  I recommend using permanent cash value insurance to replace or restore wealth when required.  For example, if in retirement the market crashes, you can withdraw funds from your insurance policy allowing your portfolio the time it needs to recover.  Without an alternative you are forced to redeem a larger proportion of your portfolio to meet your income requirements.

3.  House Money

Most of us want to have a paid off home rather than a mortgage in our retirement.  But for many the ability to unlock some or all of the capital in this valuable asset would make the difference between a decent retirement income and an extraordinary retirement income.  A reverse mortgage can provide safe, stable, and tax-free income.  The debt on the home, however, is often an issue for some.  Permanent cash value insurance solves this problem.  The insurance proceeds can pay off the mortgage and the home can stay in the family.

4.  Unlock Trapped Wealth for More Income, Less Risk, and Lower Taxes

Owing permanent cash value insurance allows you to unlock the wealth trapped in other assets.  Without it, you may find yourself owning a portfolio with a higher degree of risk than you feel comfortable doing.  In addition, you become exposed to more taxes that necessary when you opt to live off your investments rather than adopting a pay-down strategy.

If you want to save yourself, the best time to own life insurance is in retirement.    Talk to me today about putting in place now a permanent cash value insurance plan that can s

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