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Retirement Planning
For many of our clients, saving for retirement is their biggest long-term savings goal. And with good reason:
* According to the National Center for Health Statistics, Americans are living about 25% longer than their parents and grandparents. Social Security provides one-third or less of our retirement income. Many companies are changing their pension plans and retiree benefit packages to save money. Although currently low, inflation still plays a crucial role in retirement planning.
Typical retirement vehicles for individuals include:
401(k) 403(b) or 457 plans, Traditional and Roth IRAs, & Annuities
But you should not overlook the value of other options, such as life insurance for retirement planning.
Access to cash through both tax-free withdrawals and policy loans make life insurance a desirable retirement supplement tool. The policy can be funded with out-of-pocket premiums or with an executive bonus arrangement.
To help determine your client's risk tolerance when saving for retirement, consider the Questionnaire: Asset Allocation for Accumulation designed for Lincoln by Ibbotson Associates.
Loans and withdrawals will reduce cash values and net death benefits. Single premium policies and other policies with large premium deposits may be deemed modified endowment contracts (MECs). Loans and withdrawals from MECs may be taxable as income to the policyowner. Amounts used for the loans do not participate in the sub-accounts for the duration of the loan. Individuals should consider the need for life insurance as well as the costs and limitations on insurability that may affect the cost of insurance before effecting an insurance plan.
* Source: Social Security Administration, "2000 Annual Statistical Supplement, Income of the Aged Population 55 or older, 1998." Based on households with annual incomes exceeding $37,962.
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