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BSMG Blog: Protecting the Future of Families and Businesses

Minimizing Tax Implications by Using Life Insurance for Retirement Income

Do you have investors who have reached their qualified plan annual contribution limits and are looking for additional ways to create supplemental retirement income? Income replacement is often the primary reason to consider purchasing a life insurance policy, it is often overlooked as a component of a solid financial strategy tailored to address ALL your client’s specific needs. While there are many vehicles to choose from, it is important to know how life insurance may fit within your client’s short-term and long term financial goals.

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5 Reasons Clients Should Consider Fixed Annuities

 

Market Volatility, Bond Market Risk, Low Interest Rates, Portfolio Depletion and Unpredictability.

These are the main reasons clients are skeptical of Annuities. So how can you, the advisor or financial professional, turn the negative into a positive for your clients.

Strategy-Small

Since 2000, consumers have borne witness to the S&P 500® Index dropping approximately 50%, two times.1 The volatility in 2008 was unlike anything ever recorded with the Volatility Index (VIX), often referred to as the “investor fear gauge,” reaching 89.53 in October, a number representing a quadrupled expectation of market volatility.2

At the same time, interest rates, as measured by the 10-year Treasury bond yield, have continued their three-decade decline since a peak of almost 16% in 1981.3 As of May 1st 2015 the 10-year treasury was 2.12%.4 Additionally, the current average rate on a five-year jumbo certificate of deposit (CD) is 0.93%.5

The Power of Annuities in a Retirement Strategy: Download Your Copy

The timing of this mixture of volatility and low rates could not be worse. The 78 million-strong baby boomer population began hitting age 65 in 2011, and will continue to do so for the next 15 years, to the tune of almost 10,000 per day.6

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Are you protecting your international clients from costly estate taxes?

In the wake of Brexit, and its impact on the global economy, we thought it fitting to share with you some key questions for current or potential foreign national clients.

Did you know that your foreign national clients may be subjected to large U.S. federal estate and gift taxes?

Foreign Nationals who do not permanently reside in the U.S. but who have assets here cannot take advantage of some of the tax provisions available to U.S. citizens and resident aliens. When a person with these circumstances, who did not plan, passes away they could owe a large estate tax bill. Talking to your clients about planning, and asking them the right questions will help to protect them and their loved ones in the future.

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Trusts Aren't Just For The Carnegies & Rockefellers

Trusts are not exclusively for the ultra-affluent. They can play a vital role in outcomes-based planning for many individuals. Behind the accumulation of wealth lie personal objectives and values as unique to your clients as their fingerprints. Whether their goal is to fund a comfortable retirement, take care of children or grandchildren or make a meaningful social impact, trusts can play a valuable role in helping them to achieve those objectives.

Advanced Planning: Grantor Trusts & the "Power of Substitution"

As important planning tools, trusts can offer your clients asset control, legacy protection, financial privacy, probate avoidance, and estate tax mitigation.

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The 4 Most Common Risks In Retirement

  1. Market Volatility  
  2. Longevity 
  3. Inflation  
  4. Interest Rate Risk


Risk #1: Market Volatility

27% of Americans are worried the stock market will experience a major decline in the near future. 

In this fictional example, financial advisor Dave teaches you how to sell annuities as a way to mitigate client concerns about market fluctuations.

Over the years, Dave has been managing Karen’s account to maximize her growth potential. As Karen approaches retirement she has expressed her concern over what another market decline would do to her retirement income. She certainly does not want to “give back” or lose the gains she has made, yet she also wants to make sure her money continues to have growth potential. 

Read: Low Interest Rates & Market Turmoil: Managing Market Volatility with Fixed Index Annuities

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Power of Substitution Leverages Potent Life Insurance Strategy

BSMG’s Russ Towers discusses Power of Substitution Leverages Potent Life Insurance Strategy in the August 2015 issue of insurancenewsnetmagazine.
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[WEBINAR] IRA Wealth Transfer After Tax Reform

BRAMCO NATIONAL PRODUCER WEBINAR SERIES - Register Now

We Invite You To Join Us on Tuesday, July 21, 2015 @ 2PM ET

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2 Reasons to Consider the Foreign Nationals Market

Why Consider the Foreign Nationals Market?

#1 This Segment Is Growing Faster Than The Population And Is Typically More Affluent. 

Think of employees of multinational corporations stationed, physicians and medical professionals, academics and graduate students or purchasers of vacation properties.

#2 Foreign Nationals Have Unique Estate Planning Needs.

These potential clients require specialized information on strategies and planning. These needs arise based on their tax treatment under the U.S. tax code. Most Foreign Nationals aren’t aware of the considerable estate tax implications they may face, in the U.S. as well as in their home country. Life insurance can be a critical part of a comprehensive estate plan for these clients.

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Design an IRA Legacy Plan With Life Insurance

The equities market is recovering and it is becoming more common for individuals to have over $1 million in their individual retirement accounts (IRAs). As these individuals are approaching their retirement years they are collecting income from multiple sources such as the owner's job, Social Security retirement benefits, K-1 "pass-through" income from ownership of S-corp or LLC entities, and rental income from real estate.

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