Richard Wesselt, The Life Insurance General Discusses Distribution Planning At Retirement
A client reaches age fifty-five, sixty or sixty-five, has stopped work and now wants to start taking money from cash and accounts that they’ve accumulated.
Given that we’ve developed a safe and secure plan for our client prior to retirement, or we’ve re-positioned assets into safe secure vehicles, a typical distributions strategy would look something like this:
In the first bucket, we would have no more than twenty to thirty percent of assets in stock market type vehicles, which would be managed by an outside firm.
In the second bucket, there would be guaranteed income assets, such as an annuity with a guaranteed lifetime stream of income, social security (which also comes in on a guaranteed basis), perhaps a monthly pension check, or rents from income properties, royalties or something of the like.
Bottom line, in the second bucket, there’s predictability in guaranteed monthly income, in many instances for life. If a prospect does not have that, we typically work with someone on ascertaining those assets, which would provide peace of mind on a guaranteed basis.
Lastly Richard Wesselt says, the third bucket would contain something called a buffered asset. This is an asset that can be utilized if a client does not want to touch their outside assets.
The buffered asset we recommend to clients, is an over-funded life insurance contract. This allows the freedom to use the buffered asset as income if a client does not want to take a withdrawal when their outside assets, when they are under-performing. Using the buffered asset as income, allows the outside assets to come back once the market starts to gain.
So in summary distribution planning should have an investment component, guaranteed income assets, and a buffered asset. WE specialize in guaranteed income for life and creating buffered assets, through a whole life insurance contract with proper funding.