8,000 to 10,000 baby boomers retire every day. That’s well over three million new retirees per year. Many of them have had their retirement plans decimated by the failings of Wall Street and Washington. Many of them would experience another decimation if the market were to crash again, which is predicted by many economic experts. —
In June 2014, Forbes Magazine predicted a coming stock market crash worse than the 1930’s -- nothing less than another Great Depression. “If confidence in international banks erodes, the market could suffer a 30% to 60% decline,” David Tice, president of Tice Capital and founder of the Prudent Bear Fund, commented recently on CNBC’s “Power Lunch.”
For pre-retirees and retirees watching over their precious nest eggs, the challenge is finding a retirement plan that is bullet-proof to the market cycle, i.e., one that will withstand the dips and capitalize on the surges in the market while providing steady income and comfortable security. Though not understood or embraced by many advisers, a product like Universal Life Insurance satisfies that elusive criteria.
“Doom and gloom economic forecasts suggest indexed universal life products as a prudent decision for almost anyone planning for retirement,” says Derrick Loflin, President of Safe Money Group and an experienced Advisor. “The traditional investment strategy of ‘buy and hold’ can be very imprudent for many investors. Over the past 28 years an investor had to give up 11 years of growth on their investment to make up for market losses. That’s over a third of the time. It’s an investment strategy that, for many, is simply unwise.”
As a financial product, Universal Life Insurance has been around for decades. It’s unique because it combines term life insurance and an accumulation fund that often grows tax-free. Put it with a fixed index, in a policy called fixed index universal life (FIUL) insurance, and the policyholder enjoys multiple benefits at the same time: death benefits, tax-free growth, tax advantaged distributions for retirement and a hedge against an unpredictable market that, in any given year, could prove the naysayers right.
Traditional universal life did not provide that hedge. It’s the indexing that installs a built-in annual floor to guarantee that the policy’s cash value will not decrease due to market volatility – since with FIUL, the cash value is not directly invested in the market.
“Index life has the greatest growth potential” as an insurance product, says Robert Baranoff, senior vice president of LIMRA, a leader in insurance research, development and learning. “Sales of index universal life insurance have grown 192 percent from 2006 through 2010 -- an average of 38 percent annually.”
Mr. Loflin also espouses the wisdom of a best-selling financial resource. “Individuals who are worried about out-living their retirement, increases in taxes, and future market crashes affecting their retirement income can usually benefit from the same financial principles that the banks use to get rich. Becoming debt free in as little as ten years, all while preserving a substantial nest egg, is a definite possibility for many.”
“The ‘Safe Money Millionaire’ isn't about stuffing money in a mattress or hunkering down with gold bullion,” explains Brett Kitchen, author of the best-selling book. “You don't even have to have a million bucks to be in the club. Becoming a ‘Safe Money Millionaire’ simply means starting on a low-risk path that will keep … money safely growing over time—guaranteed.”
Unfortunately, when it comes to retirement, mis-information is endemic. But with products like indexed Universal Life Insurance, at the very least some risk can be removed from the future. That’s something that many retirees may want.
Derrick Loflin is President of Safe Money Group and a qualified Safe Money Advisor. He has served the Gulf Coast Area for over 10 years. As a Safe Money Advisor, he is licensed in Louisiana, Texas, Arkansas, Alabama, Ohio and Florida. He specializes in working with people who want to retire financially secure using Safe Money asset growth and protection strategies. Over the years, he has handled millions of dollars for his clients. Not one of them has lost a single penny even in some of the worst markets since the Great Depression.
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