Planning for retirement can feel overwhelming, especially with so many options available today. But how do you know which one is right for your personalized needs? And how can you create a steady stream of retirement income for life—while minimizing the potentially devastating impact of taxes and market downturns?
The good news is that there is a unique solution that, when properly designed, can help you address your biggest retirement concerns. This alternative strategy aims to help:
Over the years, you’ve probably invested your retirement savings in equities, such as stocks, mutual funds, and exchange-traded funds (ETFs). While equities can help grow your assets for retirement, they also expose you to market risk.
Our alternative strategy offers indexed crediting, a powerful way to lock in market-like returns without losing money to downturns. This helps build your retirement savings potential while protecting it from downside risk.
So when the market dips, you can take advantage of a 0% floor, meaning you won’t lose any money due to market downturns. See how a traditional equities approach compares to indexed crediting during the accumulation years.
Now that you’ve seen the power of indexed crediting in the
accumulation phase, it’s time to find ways to generate a sustainable
stream of tax-free income—while continuing to boost and protect
your accumulation potential in retirement.
During this phase, many retirees are hit with the startling reality of
the impact of taxes which make up one of the largest bills in the
income years.
The type of retirement account you have—such as a traditional or
Roth IRA—dictates how your contributions and income are taxed.
Here’s a quick comparison of the two account types*:
Our alternative strategy offers not only the protection of indexed crediting but more control over how your retirement income is taxed. By turning your traditional IRA into a tax-smart retirement income vehicle—similar to a Roth IRA—you can potentially minimize taxes over the long term. And when you combine tax-free benefits with indexed crediting, you can increase your growth potential and protect savings from market dips, as well as generate income that can last a lifetime.
The following compares our alternative strategy to traditional equities during the income phase. Almost $1 out of every $3 spent by high-income retirees goes to taxes2
*Tax treatment may be limited by adjusted gross income limits.
**Assumes a 25% tax bracket and a 7% net annual growth into a tax-deferred account.
2 Lincoln Financial Group, Research study: The underrated impact of taxes on retirement, 2010
With a traditional equities approach—which does not provide a stop loss on your money—the effects of market downturns and taxation result in running out of money in just 18 years
This is a hypothetical example for illustrative purposes only. It is not a guarantee of future performance.
*Market rates assume S&P 500 annual returns plus 1.5% management fee, excluding dividends
**Index rates assume S&P historical returns with a 12.5% cap
*** 2020 market rate reflects the S&P 500 return through March 20, 2020
Planning for your retirement objectives doesn’t have to be overwhelming. Our alternative strategy— offering the powerful combination of indexed crediting and tax-free income—can give you more control over your accumulation and income. It can help boost and protect your retirement savings potential, as well as generate a sustainable source of tax-free income designed to last a lifetime.
Your financial professional can help guide you through the process and discuss if an alternative strategy makes sense for you.
To get started, Schedule a Meeting today to get started.