Jeffrey Stemler, CLU, ChFC – Sr. Vice President, Advanced Planning
Why is it so hard to save enough for retirement?
Part of it is, it’s just “life”. We know we should start saving as soon as possible but when you are 25 and fresh out of college, married and a baby on the way – money is in short supply. In addition, if you’ve started a business, all excess money gets reinvested to build the business in the early years. Doctors have a different problem but with the same outcome. They don’t start earning “real money” until they are in their late 30’s or early 40’s.
So besides starting to save later than they should, what other issues prevent most people from achieving their goals for retirement?
Let’s look at traditional retirement strategies – 401(k)s and IRAs. The overwhelming strategy is a blended portfolio of stocks and bonds and over the long haul it should produce a positive rate of return. Unfortunately, this is an accumulation strategy, not an income strategy, AND if you are invested in the market when you retire AND the market declines YOU CAN’T MAKE UP FOR THE LOSSES because you are no longer working.
When we talk about not saving enough in addition to starting too late, studies show that on average high income earners save around 9%. However to maintain lifestyle in retirement, people should be saving 34% – that’s just not realistic.
Finally when you add in the factor of taxation on distribution, it’s like swimming upstream – every three dollars you earn, you could owe one or more to the government.
Is there a viable investment strategy that could help to make up for starting to save for retirement late.
- Can it also prevent losses due to the market when you are in retirement?
- Can it also provide income for a lifetime?
- Can this strategy eliminate taxes on withdrawals?
The answer is yes, when you use an Index Universal Life Policy that has been designed as an “income engine”.
When you get down to it, it’s just “Math”. A properly funded IUL can:
- Eliminate losses due to the market
- Increase distributions by 100% to 300%
- Avoid taxes on distribution.
Bottom line is…it’s “Math” not “Magic”.
To get more information on IUL, Asset’s Planning Compass, or other Life inquiries contact Jeff Stemler – email@example.com