By Chris Alberta
Over the past several years, my think tank and I have had the privilege of being able to study the lives of very successful people, from multi-millionaires to everyday folks who’ve accomplished their retirement goals with certainty. While these abbreviated guidelines may not “change your life”…they will most certainly enhance the time you have during your golden years.
1. Eliminate the risk and SLEEP LIKE A BABY.
How quickly we forget the anguish of 2001 and 2008. From the highs of the post dot-com era to the emotional plunder of Sep 11 in the markets, followed by a Bull Run handful of years, only to give it all back amidst the 2008 debacle. If one thing has become clear, it’s that wealthier people have one very common thread: They HATE to lose money. Rarely do we see a high-net worth portfolio that is 100% invested in the stock market…but rather a tactical blend of equities, fixed annuities, bank accounts, and permanent life insurance cash values.
And this approach, alone, is why most of our richest clientele saw the least downward movement in those nasty years. Conversely, most blue-collar and middle-class folks are encouraged to remain almost fully invested in the equity market amongst bonds and stocks. Why? Well, that’s where the revenue is for the big Wall-Street firms, of course. Interestingly, most accounts we see like this are very conservative, with many mutual funds only displaying the potential for a 5-10% range of upside potential…but certainly a downside risk that exceeds that.
As time has passed and regulations have changed, the once-maligned Fixed-Indexed annuity market has become the clear standard for retirees seeking both solid growth potential and a guaranteed “pension” style safety net that ensures zero losses on their principal.
Key thought: Decide how much of your nest egg you simply refuse to lose and be your own bank.
2. Play the odds and keep Long Term Care premiums at bay.
Many clients are concerned with the cost of nursing care, and rightfully so. But here is the twist: Much of what we hear statistically has been bent to aide the salesperson. It’s true…roughly 50% of people will spend time in a nursing home, and the average stay is around 2.5 years.
Here’s the truth: According to AARP, almost 70% of nursing home stays are less than 6 months and considered rehabilitative. Think hip replacement, stroke, etc. You can’t perform all of your activities of daily living with help…so the hospital discharges you into a place that can. So if you are considering an expensive LTC policy but are nervous about rising premiums and potentially losing the money if you never need coverage, take a hard look at SHORT TERM CARE. By law, and coverage period that is less than 12 months is considered STC.
Many of my clients have a 6-month plan that would pay the nursing care facility up to $300 per day…and it costs them less than $50 each month.
Key thought: Buy the coverage you’re MOST likely to use, not the one that pays the agent the most.
3. Spend to create a legacy
Lastly, it’s truly alarming how many folks WANT to leave at least a modest amount behind for their heirs, and subsequently try like crazy not to spend their hard earned IRA on themselves…for that dream vacation, or that first-ever convertible, etc. Do as the RICH do: Buy a permanent life insurance plan that guarantees your children what you desire on a tax free, guaranteed basis.
Once a legacy plan like this is constructed, you can build the annual premium into your budget and move on with your life. Often, clients end up looking for an avenue to filter those pesky required minimum distributions (RMD’s) through…and there is not a better mechanism around than a well-crafted life insurance benefit. By offering tax-free growth and a guaranteed legacy benefit, you can employ one of the greatest strategies of the “uber-rich” into your own portfolio and never look back. Remember…”hope” is not a retirement planning strategy.
Key thought: Given the chance, pay taxes on the SEED, and leave a tax-free harvest behind for those you love.
Chris Alberta, CEO of Senior Benefits Group Retirement Advisors and President of Alberta Enterprises Inc., specializes in retirement planning, Medicare education and wealth transfer strategies. For more information visit Albertaenterprises.com or call (888) 800-8949.
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