Hey Everybody! Here is post #2 regarding how to work toward a better retirement! Depending if you qualify, you could increase your retirement from Pension, 401K or the like by as much as 20%! Interested? Read on!!
If you are married and have a Pension, 401K, 403B or other retirement plan covered by the ERISA Law of 1974, there is a way with some judicious planning to increase your retirement payout and care for your spouse at the same time! As much as 20%!
Recently I was speaking with a retired insurance agent who is a widower. He stated that when he was planning his retirement strategy his estate attorney advised him to accede to the ERISA requirement that included his wife as a participant in his extended earnings from the insurance company that employed him. As often happens in life, the expected did not occur and she died first. Since he has been retired for 23 years this means that for 23 years he has received 20% less in his retirement payout than he would if he had declined the ERISA requirement. That would have meant 20% more money for the time that he and his wife were retired together! His statement to me was, “I had over a million dollars in life insurance already paid for. Including her was unnecessary!”
Now let me quickly add that the Employee Retirement Income Security Act of 1974 is a good law and has meant that many spouses have had a retirement after their spouse died because of this law. But like most well meaning government laws, for some people the law that was designed to help, becomes restrictive. It is to those people and those that are interested in planning carefully for retirement that I address this.
The arithmetic is simple: Whenever an insurance company or any other retirement payor calculates the payout to a retiree, if the plan is for a Joint and Survivor payout, the amount paid to the retiree is reduced – sometimes by 10%, much of the time by 20% and in a few cases as much as 30% - and then at the retiree’s passing the spouse typically receives 50% of the payout paid to the retiree. If the retiree and his spouse agree (has to be in writing), the retiree can receive his retirement funds without discount, and … if the plan is done correctly … the spouse at the retiree’s passing has more money that they would if the Joint and Survivor provision was elected.
How is this done? Life insurance. Yes, that old Whole Life or Universal Life policy is the answer to this. It is not flashy or exciting to talk about. But it does what no other financial product can do – guarantee a tax-free benefit to the beneficiary! And with that benefit, there are no restrictions as to how the money is to be invested! It is there when needed most!
As I mentioned first, this plan is not for everyone. But there are many who have the means to address their retirement needs without the aid of Federal intervention. If you are that person and want to explore whether you can qualify for an additional 10%, 20% or even 30% more in your retirement, why don’t we have a conversation? You may find that with some planning, retirement will be a bit sweeter than you thought!
To all, my best wishes for a great day and happy retirement!
Geary Newman 404.427.1885