Life Cycle Financial Planners, LLC

Author: Ted Bernstein

  • 10 Life Insurance Underwriting Tips To Lower Your Costs

    10 Life Insurance Underwriting Tips To Lower Your Costs

    Life Insurance Underwriting – Demystifying The Black Box of Underwriting

    Sex, Drugs and Genetics

    One of the most effective ways of reducing your cost of life insurance is by improving the rate class or making sure to get the best class possible when buying new coverage. Once you decide to purchase a life insurance policy, the process of underwriting begins. Life insurance underwriting is the process allowing an insurance company to determine the appropriate rate class for your policy. It is important because the rate class determines the premium. There are many different rate classifications, usually starting at preferred. Most companies use a system with 16 extra classes – the highest rating being a Table 16.

    A system of credits and debits.

    Overweight by 20 pounds? On high blood pressure medication? Smoke an occasional cigar or occasionally use marijuana?

    Most people feel certain that any one of these will cause their life insurance premiums to be higher. In most cases, not one of them will increase the rate or knock you out of standard rates.

    You should expect to pay the lowest possible premiums and receive the best rate class each company offers, based on your specific information.  It is the responsibility of your agent to get you the best rate by giving the underwriters all the information in the best light possible. Underwriters convert positive information into credits and negative information into debits. More information is better. Still, too many people are not paying the lowest possible premiums.

    The difference between one or two rate classes can lower premiums by 20% or more, annually.

    Life insurance underwriting is a blend of art, skill and experience. The key to getting the lowest rates possible is full disclosure on your part. The improvements in medical sciences are leading to lower premiums.  These improvements lead to more people reaching life expectancy, resulting in decreasing premiums. In other words, the rates you are paying on policies issued several years ago are likely MORE than new policies issued today, even though you are older. If you are in similar or better health, you should be able to reduce your cost of life insurance. 

    The following issues require good life insurance underwriting management. A good underwriter will consider many factors to determine your rate class. The more information you and the agent provide to the carrier, the better your chances will be in creating maximum credits:

    • Extra weight. Most people carrying extra weight miscalculate by a lot how their premiums will be affected.  Typically, unless the extra weight puts you in the obese class or is causing other medical problems, added pounds do not automatically warrant any rate increase. 

    • Cardiovascular issues.  Many life insurance companies excel at underwriting these cases.  If there is good follow up and control, many insurance companies will consider standard rates after a few years.

    •  If you have had cancer in the past, you have a reasonable chance of getting a policy with standard or preferred rates, depending on the history and your current health.  Do not assume the worst; this is a classic mistake made by people and their advisors, including their physicians. I have many clients with cancer history who now have standard rates.

    • People with Type 1 diabetes typically have impaired life expectancy across the board, so your rates will depend on how well controlled your condition is and what you need to control it. If well controlled, Type 2 should lead to a smaller spike in rates. Diabetes is complicated and requires excellent underwriting.

    • Mood Stabilizing Drugs, Depression, Psychotherapy. If you’re taking medication for an ongoing condition  such as anxiety or depression (meaning it’s more than just a temporary state due to, say, a loved one’s death), you will probably see higher rates, but typically not what most people expect. The insurance industry needs to review these issues regularly as the medications are better and untreated anxiety and depression is far worse.

    • Family history.  If immediate family members have had serious or hereditary conditions, that may prevent you from getting preferred rates.  The biggest culprits here are cardiovascular disease (especially if a parent died from it before 60), cancer and diabetes.

    • Cholesterol & High Blood Pressure. Controlled high cholesterol and blood pressure, by themselves, typically do not add extra cost or deny you preferred rates.  With these conditions, it is all about control and stability.

    • Nicotine use. The use of nicotine comes in many delivery systems and life insurance companies are not consistent about this topic.  Using the Installment Payout Option can help smokers reduce their premiums by as much as 40% per year.

    • Driving History. If you have more than two moving violations in the last three years, you likely won’t be able to get the best life insurance rates. Time is your friend here, even for the most serious offenses.

    • Substance abuse. It is impossible to generalize with substance abuse history.  However, with full disclosure and a strong record of non usage, life insurance can be obtained at standard rates. 

    • Lifestyle/Career Issues. Any hazardous, regular activities such as rock climbing, motorized racing, skydiving, ultralight flying, hang gliding, and scuba diving could increase life insurance premiums.  

    While some companies increase rates for firefighters and police officers, many do not.

    Full disclosure and working with an experienced agent is crucial.  Knowing which companies excel in the each area and then not being afraid to challenge underwriters are some of the advantages you will get from an experienced professional.

    Want to learn more? Please contact me at 561-869-4500 or by email. I will clarify and answer any questions on a complementary basis.”

    Ted Bernstein Boca Raton Florida 

     

     

     

     

  • Ken Fisher Hates Annuities? Pros and Cons + The Truth

    Ken Fisher Hates Annuities? Pros and Cons + The Truth

    Does Ken Fisher hate annuities? If Ken Fisher is against guaranteed, lifetime income in retirement, then maybe Ken Fisher hates annuities. Read the annuities pros and cons here before you decide.

    Then you can contact Ted Bernstein at 561-869-4500 and request a complementary income annuity quote with guaranteed, lifetime income that you can never lose.

    Guaranteed, Lifetime Income Matters Most in Retirement

    Large amounts of guaranteed income for life is your most important asset in retirement. As we get older, it becomes more difficult to manage complex investment portfolios. Many people have investment advisors to help them manage these complex retirement portfolios but keeping up with the minimum knowledge required to engage with your advisors can be challenging in your 70’s, 80’s and 90’s. In retirement, investment value and asset volatility are simply the wrong measures if your goal is to have stability based on guarantees and predictability.

    “Communicating with savers in terms of asset accumulation or the size of investment accounts is unhelpful and some retirement experts, including professors and other thought leaders, suggest it is even misleading.” Ted Bernstein

    There is a disconnect caused by how the brokerage industry expresses the value of what matters in retirement. This disconnect is putting people at risk without sufficient reward. You must ask yourself what is more important, guaranteed principal protection or a few more percentage points of yield? 

    Can you afford to lose 30% of your retirement assets at this point? It just happened to millions of people in 2008. If you were one of those people, can you afford to lose principal again?

    Maybe the more important question is this: What is the upside for taking on this risk? The risks far outweigh the rewards. Do you believe the market has a greater chance of being up 30% from here or down 30% from here?

    There Is A Better Alternative:

    Considering that you CAN participate in market gains when there are gains to be had and NEVER lose principal when the markets are down! Don’t choose to forego the protection guaranteed by the insurance company? In most cases, the insurance companies are rated better than the stocks in your portfolio. 

    With indexing, you can be in the market and benefit from the gains without putting your retirement assets at risk. Would you rather have an unprotected account made up of equities that can decrease?

    With this better alternative, you can “flip the income switch” whenever you choose and begin to draw a guaranteed, lifetime income stream that can NEVER go down, for as long as you live.

    Nothing else can do this. It is that simple – that cut and dry.

    Guaranteed Income + 100% Liquidity is finally being recognized as a powerful combination for retirement security.

    Lifetime income will hedge away longevity risk. It is more important than ever for people to understand the difference between asset accumulation in retirement versus guaranteed, lifetime income streams. Until now, the primary goal has been to increase your assets in order to draw them down in retirement. Professors at leading universities and retirement centers around the world are now asking retirees to re-think the conventional wisdom. Using the right annuities that guarantee liquidity from day one, you can have your cake and eat it too.

     “A portfolio of stocks and bonds cannot provide a guaranteed income for life, with Zero risk. On the other hand, the right longevity annuity contract does GUARANTEE you will never lose a dollar’s worth of principal and it will guarantee income you cannot outlive. Today, retirement age people want to protect their IRA assets and other retirement assets from any market loss and interest rate risk. But, they want some upside when the markets are up. It is okay to have some assets in the stock markets but I am against having any retirement assets in the stock market WITHOUT AN INDEXING WRAPPER TO PROTECT THE ASSETS FROM LOSS. Whenever we encounter a client without the wrapper, we ask one simple question: ‘What benefit are you getting from investing without the protection?’ Once people understand how these tools work for them, they re-balance immediately.

     Want to learn more? Please contact me. I will clarify and answer any questions on a complementary basis.”

    Ted Bernstein, Boca Raton Tribune

    P.S. Ken Fisher is wrong about annuities. Why does Ken Fisher advertise, Ken Fisher hates annuities? The answer is simple. Ken Fisher hates annuities because Ken Fisher does not make asset based commissions or recurring revenues from equity accounts when you buy an annuity from an insurance company. 

  • Federal Estate Tax Repeal – Bad For Business

    Federal Estate Tax Repeal – Bad For Business

    The life insurance industry let us down when it allowed the estate tax rate to settle at 40% and the lifetime credit (exemption) to  rise to $12MM per couple. The impact is still punishing planners of all stripes. It is time for life insurance companies to step up and commit to national advertising and marketing campaigns to promote the virtues of their core products, especially permanent life insurance.

    Since then, the pin has been pulled from the grenade for PERMANENT life insurance. If the estate and gift taxes are successfully repealed in an upcoming tax reform act, it will be a devastating blow for the jumbo case market and for PERMANENT life insurance. The grenade will have gone off. I understand there will be a few niche markets (key man, forced savings strategies, over-funding for retirement income, premium finance and others) that will survive. Those niche markets for permanent insurance may be meaningful enough for a handful of carriers; not for dozens of them. There will always be a need for low face amount, permanent policies. To be clear, the sale of these permanent policies does not support or lead to a successful, bustling practice. That model used to work by helping new agents develop the stepping stones to much larger opportunities. That model is on life support and the repeal of the estate tax will be its end.

    Just look at the overall permanent insurance numbers since the industry did not prevent the tax from being lowered or the exemption from rising to almost $6MM per person. Hopefully, the life insurance industry is mobilizing their influence and inspiring their troops to prevent the estate tax repeal from becoming reality. Personally, I don’t see it happening and I’m not sensing the passion and the fear required to win this battle. As much as anyone else in our industry, I hope that I am wrong.

    Whether the tax is repealed or not, I would urge life insurance companies to act like companies in  other industries who own the responsibility for creating a product’s demand. Without advertising and marketing campaigns on a national stage to re-brand the image of permanent life insurance and its distribution system, the remaining agents who average 60 years old will continue jumping ship. Leaving the responsibility and the cost of creating demand for this product to the distribution system, or no one, is a recipe for further disaster. Manufacturers create organic demand for their products. The auto industry and consumer electronics are two great examples.

    Imagine if Apple and BMW left all sales and marketing solely to their local dealerships or the local wireless stores? No national sales and marketing campaigns to launch new products, defend against competitors, shape markets or educate consumers?

    Today, most life insurance companies do not advertise on a national stage and if they do, they are brand advertising, which is of little or no value in business development at the local level. We don’t need anymore TV branding ads from insurance companies during The Masters. What the industry DOES NEED is for every relevant company to start running advertising campaigns about the virtues of permanent life insurance (and their other products) during the NCAA tournament, The Bachelor, the morning news shows, The Late Show with James Cordon and The Masters. This is an industry-wide problem and the industry needs to step up.

    Permanent life insurance is a remarkable tool with extraordinary flexibility and great versatility. It can be customized, by the right professional, so that no two permanent life insurance policies are the same. No two buyers are the same. Their policies can and should reflect their differences, their needs and their desires, now and in the future.

    One client may have an over-funded $5,000,000 IUL with Option C and a death benefit payable in a lump-sum. Another may have a $5,000,000 GUL with Living Benefits and the Installment Payout Option to protect his/her family with 20 guaranteed payments of $250,000 for 20 years. Another client may have a minimum funded UL tied into their lifestyle, earning credits for living the good life. And another might have a $5,000,000 WL policy with vanishing premiums.

    Just like the combination of apps on my Smart Phone are not like the apps on another’s, no two permanent life insurance policies should be the same. We each start with a Smart Phone that makes calls. But, the way I intend to use mine is different than how you use yours. Our needs are different and that is what leads to which apps we download.

    To help our industry fight the battle against the estate tax repeal, contact AALU for information about who to contact in Washington.

    Ted Bernstein can be reached at Life Cycle Planners or by calling him in Boca Raton, Florida at 561-869-4500.

    Don’t need your life insurance policy anymore? It has value, even term insurance. Read more…

  • 10 Most Common Retirement Threats – Protect Your Nest Egg

    10 Most Common Retirement Threats – Protect Your Nest Egg

    Watch out for these common retirement threats to your nest-egg.

    Follow these risk proof retirement tips:

    1. Longevity Risk: Considered by many to be the most dangerous  of all retirement threats as life expectancy continues to increase. To mitigate longevity risk, you want to convert lump-sum retirement assets into guaranteed income streams for life. This retirement threat acts as a multiplier to all the other risks. Longevity risk is the risk of outliving your assets.

    2. Insufficient Lifetime Income: A sustained period of near zero percent interest rates on safe investments and the evolution from government and corporate pensions to the privatization of retirement accounts has left many people without sufficient amounts of reliable income for life. Retirees today must reconsider what liquidity means in retirement.  What percentage of your nest egg should be in lump investments versus guaranteed lifetime income you cannot outlive?  What is the right percentage of each to ensure you don’t run out of gas and run the risk of outliving your assets?

    3. Inflation: With interest rates at historic lows, inflation is a major retirement threat. Learning the secrets about the strategies to manage this “silent” threat is invaluable knowledge.  Like un-managed high blood pressure, inflation causes damage that can go un-noticed for too long.  Periods of low interest rates are often confused for periods of “no inflation”.  Inflation is especially threatening to your nest egg due to limited options to replenish principle.

    4. Incorrect Asset Allocation: The proper asset allocation in retirement is critical. Why do so many retirement aged people say a stock market correction or rising interest rates is keeping them awake at night?   IT DOES NOT HAVE TO. Learn the right allocation strategies for a simpler retirement.

                                  If you make one change today, increase the amount of guaranteed income from indexed,                                         income annuities.

    5. Rising Medical Costs: The retirement threat considered by many to be the one capable of immediate damage to a nest egg.  

    1. Loss of Spouse & Dementia– Both married couples and single retirees can expect to deal with the real issue of potential dementia in the aging process. For married couples, the loss of a spouse often compounds these challenges and has proven to be one of the most significant retirement threats, especially when one spouse has primary responsibility for overseeing the retirement plan. Leading economists and retirement scholars agree about the benefits of guaranteed income you cannot outlive.

    2. Investment Scams: Be careful of “too good to be true” investments. I have very good radar for scams. Feel free to contact me for an opinion.

    3. Fees: Fees and other charges are similar to taxes levied against your investments. They are disclosed, easy to measure and they add up. 

      4. Bad Advice: You know it when you see it. I meet with people in or near retirement every day whose number one objective is “no losses”. Yet, they’re retirement assets are invested in stocks and bonds. It never hurts to get another opinion and having a team of professionals with different disciplines is good prevention. Just make sure one of them is a retirement income specialist.

      5. Market Losses: Right up there with longevity risk, market losses can be the most devastating retirement threat. You cannot afford losses in retirement. You don’t have income to replenish them and you don’t have the time needed to overcome them. A fixed income annuity keeps you invested with no losses, EVER.

      This is just a partial list of retirement threats to your nest egg. The key to security in retirement is to make sure you are not vulnerable to any of these threats. With the right strategy, you can eliminate every risk to your nest egg that leads to peace of mind you may not currently enjoy.

      Please call me at 561-869-4500 or email me, Ted Bernstein, about a complementary consultation about your specific needs.

  • Why Income Annuities Are Better Than Bonds

    Why Income Annuities Are Better Than Bonds

    What is the difference between bonds in retirement and annuities?

    The Wall Street Journal described income annuities as “super bonds”.

    Within the backdrop of retirement planning, annuities are often compared to bonds and vice versa. They are different. It is important to know their differences in order to appreciate the superior qualities of an income annuity for retirement income purposes.

    Shortcomings of Bonds:

    • A bond or a bond portfolio cannot provide guaranteed income for life.
    • A bond or a bond portfolio does not guarantee results, of any kind.
    • Bonds and bond portfolios have default risk that bondholders accept without any kind of insurance (General Motors is a recent example of worthless bonds that offered investors no recourse).
    • Bonds are usually not redeemable early without an early withdrawal penalty.

    The advantages of Fixed Indexed Annuities:

    1. Guaranteed income you cannot outlive, no matter what;
    2. No principal loss, ever;
    3. Market upside when markets are up; and
    4. 100% liquidity from day one.
    5. Backed by insurance companies with strict reserving regulations and state guaranty funds.

     

    Below are powerful conclusions from one of the leading retirement scholars in the world, Professor Wade Pfau. According to Professor Pfau:

    “The funds used to buy a fixed deferred income annuity should be viewed as a substitute for a bond investment when evaluating a holistic retirement portfolio.”

    “Our findings suggest that a short deferral income annuity can both reduce the cost of funding retirement and provide important behavioral benefits to clients concerned about near retirement market performance.”

    “Managing assets to create income becomes a significant challenge for the increasing percentage of Americans who suffer from dementia in old age. A retiree can reduce all of these risks through the purchase today of a guaranteed income stream in the future…”

    “A Deferred Income Annuity can also be beneficial as insurance to protect against the risk of outliving assets either due to poor investment performance or reduced cognitive ability in old age.”

    Using the right income annuities will simplify retirement planning and provide guaranteed results.

    Please call 561-869-4500 or email me, Ted Bernstein, to continue our discussions for your specific needs.

  • New York Times: ‘Consider An Annuity’ In Retirement

    New York Times: ‘Consider An Annuity’ In Retirement

    This retirement story in the New York Times, How to make your money last as long as you do, hit the bullseye by explaining how annuities provide guaranteed, lifetime income in retirement.
    “Consider an annuity”… [Retirees] will always have enough to cover essential living expenses, no matter how long they live or how badly their investments perform.”

    With a portion of your retirement funds in the right type of annuity, the principal is protected by creating guaranteed income that will last “as long as you do”. As you get older, the amount of income increases and will not level off until you begin to draw a paycheck from the contract.

    In other words, anyone who wants absolute security in retirement should take advantage of this special kind of annuity.

    No other retirement solution offers 100% principal protection, participation in market gains, tax deferral, favorable taxation on distribution, liquid from day one and no commissions paid by you or your account.

    Consider an annuity if you are:

    1. Married and in, or near retirement. 
    2. Want dependable, predictable income for life.
    3. Single, in or near retirement.
    4. Seeking a simple and safe solution built entirely on guarantees.
    5. Interested in transparency, disclosure and regulated products.
    6. Seeking guaranteed income for life with NO principal risk.

    ROI in retirement is reliability of income.

    With the New York Times suggesting that people “consider an annuity” to make their money last as long as they do is supportive of everything that is stressed by economists and professors all over the world. Guaranteed, lifetime income in retirement is finally beginning to receive mainstream attention.

    Do you have assets in an IRA? Read this.

    If you would like to meet or talk by phone, please email Ted Bernstein or call me at: 561-869-4500

  • Don’t Need or Don’t Want An Existing Life Insurance Policy?

    Don’t Need or Don’t Want An Existing Life Insurance Policy?

    Do You Know The Market Value Of Your Existing, Inforce Life Insurance Policy?

    Every day, people are receiving significant cash payments for unwanted or unneeded life insurance policies they thought had no value.

    If you are 65 or older, you may have a policy with asset value in the secondary market. The value of policies is measured as a percentage of the face amount. If you have a $2,000,000 policy with a settlement value of 10%, it is worth $200,000. It is fairly simple and straightforward to get an appraisal done to determine your policy’s value.

    Please email or call me at 561-869-4500. Visit us at Life Cycle Planners in Boca Raton, Florida.

    The secondary market is the market for unwanted life insurance policies – they are usually institutional investors. A good analogy is Carmax. They buy cars from people who don’t want or need them anymore. They specialize in the aftermarket of automobiles. In the life insurance industry, there are buyers who specialize in this market and they are typically the highest bidders.

    The state of Florida has made it mandatory for life insurance companies to inform Floridians that they should consult with a professional when contemplating a change:

    …“a life insurer shall provide an individual life insurance policyholder with a statement informing him or her that if he or she is considering making changes in the status of his or her policy, he or she should consult with a licensed insurance or financial advisor.”

    If you have a policy with cash value, its value is based on it and nothing more. Life settlements may not appeal to everyone. Some people don’t like the idea of strangers having an interest in their mortality. It is a perfectly reasonable position, regardless of the potential financial benefit that might exist. There can be meaningful differences in the offers you receive from the secondary market.

    Term life insurance policies may have value in the secondary market.

    There may be no cash surrender value in your life insurance policy but there may be great “market value” for a life settlement company. The payment you receive in a life settlement transaction is the market value (see the recent case studies below).

    It may be in your best interest to consider selling. The goal is to compare offers you receive against the value in the policy.

    More than 90% of seniors lapse policies without knowing about this option. They would have considered a life settlement if they were aware of the process.

    Further, 79 percent feel their advisers should have told them first.

    Depending on several factors, including age, health and policy type, life insurance policies can be valued as much as 20-30% of the face value. If you no longer want to pay premiums for a policy, there are realistic options to consider.

    The reasons to  consider selling an unwanted or unneeded policy:

    · Receive a higher cash payout than cash surrender value.
    · Receive money for a term policy.
    · Create cash to fund retirement solutions such as guaranteed income annuities, long term care insurance or life insurance with the installment payout option.

    For example, 30 years ago, Dr. Smith purchased $2,000,000 of life insurance to protect his wife and children against the loss of his $300,000 income. He was 46 when it was issued and today, at 75, his children are grown and the need for income protection is gone. With nearly $200,000 of guaranteed lifetime income from annuities, a pension and social security, Dr. Smith feels the policy is unnecessary.

    The insurance policy had a cash value value of $90,000 if he walked away. The Life Settlement value was 15% of the face value, or $300,000. The decision was simple in this case.

    Unfortunately, each year there are too many people who are still unaware of life settlements or they fail to give it proper consideration.

    Potential Disadvantages:

    1. Life Insurance benefits are usually income tax-free. Some portion of a life settlement may be subject to income tax.
    2. Paperwork is required to transfer the ownership of the policy.
    3. Proceeds will benefit the buyers, typically non-family members.

    Organizations such as the AICPA and hundreds of esteemed estate planning law firms are on record advocating the benefits of life settlements. Life insurance is an asset with great potential value.

    RECENT CASE STUDIES REPORTED IN THE INDUSTRY

    – an 88 year old male sold a $2,500,000 John Hancock policy, which netted him $500,000 (cash surrender value was $0),

    – an 88 year old male sold a $2,000,000 universal life policy for $1,110,000 (cash surrender value was $218,000),

    – a 64 year old female sold a term policy for $20,100 (the face value was $250,000; she kept $50,000 for her beneficiary),

    – a 72 year old man sold a $896,450 Transamerica policy for $196,476 (cash surrender value was $94,647),

    – a 61 year old man sold a $400,000 Mass Mutual term policy for $220,400.

    Please email me at Ted Bernstein or call me at 561-869-4500. Visit us at Life Cycle Planners in Boca Raton, Florida.

  • Department of Labor Fiduciary Rule is DOA

    Department of Labor Fiduciary Rule is DOA

    Today, the President delayed the Department of Labor’s Fiduciary Rule that was set to take effect in April. I have been advocating for either a repeal or a delay for many months. The rule was hastily written and poorly written during the Obama administration.

    The DOL fiduciary rule attempted to legislate the definition of working in the best interest of a client. On the face of it, trying to legislate this kind of behavior is absurd. Compounding that absurdity, the regulation itself was rife with ambiguities that would undoubtedly create litigation between consumers and insurance companies, wealth management companies, banks and others. This country does not need anymore poorly drafted legislation leading to litigation over judgment calls.

    All is not lost however. I truly believe that most professionals are working in the best interest of their clients. There are, for sure, some bad actors who just don’t seem to understand this concept. They seem to be intensely focused on how much commission a product pays or how high of a fee they can charge against the account each year. They will survive changes in regulations, that is for sure. The DOL’s failed attempt here has a silver lining. It most certainly was felt by some of these bad actors as a shot across the bow. Some will be more cautious now, some may even try to up their games.

    For consumers of financial service products and advice, many have been monitoring the debate. Working in the best interest of a client is the gold standard for service. Fees and commissions are not the litmus tests. Charging fees is not better than being paid commissions. They are just different. That is an easy point to make. As one of the country’s leading proponents for life insurance without commissions, I would be the first person to say that a fee based model is better; but it isn’t.

    The right professional makes recommendations based on several factors that place well ahead of compensation. The rejection of the DOL “fiduciary rule” today will not ensure that consumers have an easy way in determining who is working in their best interest. To know that always has and always will require a bit of work. I suggest that consumers ask for referrals, speak with other professionals such as C.P.A’s and attorneys as well as local chambers of commerce leaders. Trusting your gut is also important, along with the other due diligence.

    If you would like to discuss this topic or anything else, please email Ted Bernstein or call me at: 561-869-4500

  • Make Annuities Great Again!

    Make Annuities Great Again!

    Keep current with relevant News from the Life Cycle Planners Newsletter: http://conta.cc/2iKkDkP

    Guaranteed Income Matters in Retirement

    Large amounts of guaranteed income for life is the most important asset you can own in retirement. As we get older, it becomes increasingly more difficult to manage complex investment portfolios. Many people have investment advisors to help them manage these complex retirement portfolios but as we get older, even keeping up with the minimum knowledge required to engage with advisors can be challenging, at the very least. In retirement, investment value and asset volatility are simply the wrong measures if your goal is to have stability based on guaranteed, predictability. Communicating with savers in terms of asset accumulation or the size of investment accounts can be unhelpful and some retirement thought leaders would suggest, even misleading. 

    There is a disconnect caused by how the brokerage industry expresses the value of what matters in retirement. This disconnect is putting people at risk without sufficient reward. You must ask yourself what is more important, guaranteed principal protection or a few more percentage points of yield? 

    Can you afford to lose 30% of your retirement assets at this point? It just happened to millions of people in 2008. If you were one of those people, can you afford to lose principal again?

    Maybe the more important question we need to be asking is this: What is the upside for taking on this risk? From my perspective, the risks far outweigh the rewards. Do you believe the market has a greater chance of being up 30% from here or down 30% from here?

    There Is A Better Alternative:

    Considering that you CAN participate in market gains when there are gains to be had and NEVER lose principal when the markets are down! Don’t choose to forego the protection guaranteed by the insurance company? In most cases, the insurance companies are rated better than the stocks in your portfolio. Doesn’t that say a lot?

    Using an indexed fund, you can be in the market and benefit from the gains without putting your retirement assets at risk. Would you rather have an unprotected account made up of equities whose value can decrease by events for which you have absolutely no control?

    With this better alternative, you can “flip the income switch” whenever you choose and begin to draw a guaranteed, lifetime income stream that can NEVER go down, for as long as you live.

     Nothing else can do this. It is that simple – that cut and dry.

     Guaranteed Income + 100% Liquidity is finally being recognized as a powerful combination for retirement security.

    Lifetime income will hedge away longevity risk and 100% liquidity of assets ensures flexibility with the ability to maneuver when necessary. It is more important than ever for people to understand the difference between asset accumulation in retirement versus guaranteed, lifetime income streams. Until now, the primary goal has been to increase your assets in order to draw them down in retirement. Professors at leading universities and retirement centers around the world are now asking retirees to re-think the conventional wisdom. Using the right annuities that guarantee liquidity from day one, you can have your cake and it too.

     “A portfolio of stocks and bonds cannot provide a guaranteed income for life, with Zero risk. On the other hand, the right longevity annuity contract does GUARANTEE you will never lose a dollar’s worth of principal and it will guarantee income you cannot outlive. Today, people want to protect their IRA assets and their personal retirement assets from any market loss and interest rate risk. But, they want some upside when the markets are up. I am not against having assets in the stock markets but I am against having retirement assets in the stock market WITHOUT AN INDEXING WRAPPER TO PROTECT THE ASSETS FROM LOSS. Whenever we encounter a client without the wrapper, we ask one simple question: ‘Why; what benefit are you getting from investing without the protection?’ Once people understand these specially designed tools work exactly this way, they re-balance immediately since there is no downside.

     If your understanding of a longevity annuity is different than this, please contact me. I will clarify and answer any questions on a complementary basis.”

    Ted Bernstein, Boca Raton Tribune

  • Today Show: Make your money last with an annuity

    Today Show: Make your money last with an annuity

     

    The Today Show this week includes an important recommendation about guaranteed, lifetime income. Although 2016 was a banner year for indexed annuities, we have a long way to go. Too many people do not understand indexed annuities and as a result, they are still measuring their retirement security by the size of their portfolios. As this story points out, you want to “convert” your retirement assets into an income stream that will last as long as you do. Guaranteed income in retirement is the gold standard for security.

    “Building block 2: A Fixed Annuity.

    Consider converting a portion of your nest egg into a fixed, immediate or deferred annuity that will cover the gap. Essentially, you’re using part of your nest egg to buy a paycheck that can be structured to last as long as you (and perhaps your spouse) live.” 

    http://www.today.com/series/starttoday/jean-chatzky-how-make-your-money-last-after-retirement-t106561

    If absolute security is a primary retirement goal for you, please contact me to arrange a discussion about guaranteed income solutions. There are dozens of threats to your nest egg in retirement and I will explain how to mitigate them with the power of guaranteed income contracts. You will not learn about these strategies from traditional money managers. You can email me or call me directly at 561-869-4500.