Thought of the Day

Monday, April 20, 2009

Thought for the Day:
The question isn't at what age I want to retire, it's at what income. ~George Foreman




Thought for the Week:

A $1million retirement portfolio, managed in the typical fashion, yields $40,000 to $50,000 per year of income (mostly taxable) while being substantially exposed to the whims of the market. If long-term care is necessary, the client is subject to tremendous stress and uncertainty about their future quality of life.

The same $1million could be allocated thusly:

$600,000 in immediate life annuities: $4400*/mo. 65% tax free
$300,000 in a managed account: $1000*/mo.
$60,000 in MoneyGuard $300,000* for LTC
$100,000* to heirs, if never used
$40,000 in a cash account $40,000+ for liquidity

*Not precise amounts as they will vary by age, sex, health status and/or individual preferences of the client.

More and more advisors and financial planners are becoming aware that insurance products, previously ignored to a great extent by the financial planning community, should play an integral part in a retirement portfolio.

When the pension laws were changed in the mid 80's, the majority of pension plans were changed in favor of IRAs and 401(k)s, putting most future retirees in the position of having no guaranteed pension income except Social Security. Each time the market goes through a period like we have now, every client and most advisors are subjected to stress and uncertainty. But it is the client who suffers most, as their income and their security are at risk. Add to this, the eminent issue of long-term care faced by everyone and experience by half of all retirees, and it becomes obvious to most that there must be a better way.