FINANCIALLY
Speaking
Using The Best Tools To Save For Retirement
by
Jeffrey M . Orth , ChFC , CASL Investment Advisor Representative of HTK
Jeffrey M . Orth is a Chartered Financial Consultant , a Certified Advisor in Senior Living , and an Investment Advisor Representative , with over 10 years experience as a business and personal planning , insurance , and wealth management specialist Jeff is available for group lectures and private consultations . Visit his website at www . ifitfinancial . com or call 408.842.2716 .
Anice couple came to my office today and voiced a concern I have heard many times over the last decade in this business . They told me they were not as worried about dying too soon as they were about running out of money before they ran out of breath ! The idea of being old and broke is pretty scary , and with people commonly living longer in retirement than ever before , this is a valid concern .
As a financial advisor , I help my clients accumulate wealth to enhance their lifestyle and save for retirement . This includes assisting with Social Security planning and diversifying assets for maximum tax efficiency so that they get to keep more of what has been accumulated over the years . This will help them have more money available during the retirement years .
There are a number of commonly available tools that can be used to accumulate wealth for retirement such as 401 ( k ), Simple-IRA , SEP-IRA , Roth-IRA , 403 ( b ), and an assortment of Defined Benefit and Pension Plans . These options can all be used effectively under the right set of circumstances , but they are not the only tools that can help you prepare for retirement . Before we look at some other options , let ’ s first discuss about what “ success ” would look like .
What benefits would you want in a long term retirement accumulation plan ? Here is a list of commonly desirable benefits :
• Tax deferred growth of the investment
• Tax free withdrawal *
• Competitive rate of return
• High contribution limits
• Self-completion protection
• Disability protection **
• Guaranteed collateral opportunities
• Safety of principle
• No loss provisions
• Guaranteed loan options
• Unstructured loan payment options
• Deductible contributions
There is only one product that offers all but one of these benefits , and that is fully funded permanent life insurance .
When consumers consider various retirement planning options , many overlook Cash Value Life ( or permanent ) Insurance . While the contributions made to a life insurance policy are not tax deductible , Cash Value Life Insurance has tax-deferred growth and tax-free withdrawal benefits . In addition to these benefits , life insurance also creates an immediate estate in the form of tax-free cash for loved ones when they need it most . The face amount of the life insurance policy will determine the maximum amount you can put in , while maintaining all of the benefits available with the product . Assuming these parameters are met , policy owners are able to heavily fund their permanent life insurance plan , and in the future , the accumulated cash can be taken out tax-free through a combination of withdrawals and loans . This money can be used for a variety of reasons , including unexpected emergencies , making a major purchase or supplementing retirement income . In comparison , the owner of most qualified plans must wait till 59½ to make an income tax penalty-free withdrawal and could be heavily penalized if sufficient withdrawals are not made on and after age 70 .
What if something you “ knew to be true ” turned out not to be true … when would you want to find out ? Perhaps you are one of those people who think the only value of life insurance is the death benefit . If so , maybe you need to get some more information about all of the benefits available with Cash Value life insurance .
Successful retirement plans going forward call for flexibility and improved longevity . Cash Value life insurance can be a vital piece of the puzzle in structuring an overall retirement plan . If you have questions about how the living benefits that come with Cash Value life insurance might fit into your overall retirement plan , perhaps you should call a qualified full service financial advisor today to find out if your current plan will help you reach your retirement goals .
* As long as the premiums are paid and the policy doesn ’ t lapse . Assumes contract is not a Modified Endowment Contract under IRS § 7702A
** Disability riders can be available as an optional rider that can be added for an additional fee .
A4CM-0210-10E2
The author ’ s opinions , comments information , etc . are those solely of the speaker and are independent of , and do not represent , HTK , and should not be considered as specific investment or planning advice . Please consider your options based on your individual circumstances . Gilroy Today and other listed entities are independent of and un-affiliated with , HTK and Integrated Financial Benefits Network ( IFit ). Registered Representative of , and Securities and Investment Advisory Services offered through Hornor , Townsend & Kent , Inc . ( HTK ). Registered Investment Advisor . Member FINRA / SIPC , 16845 Von Karman Ave , Ste . 225 Irvine , CA 92606 ( 949 ) 754-1700 . I Fit is independent of HTK . CA Lic # 0C49291 ( Not an offer or solicitation in any state where representative is not properly licensed or registered .) Loans and other policy withdrawals will reduce the death benefit amount and may be subject to surrender charges and income taxes . All guarantees are based upon the claim-paying ability of the insurer .
S P R I N G 2 0 1 4 G I L R O Y T O D A Y 9