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This post has been updated for 2022

Last year the COVID-19 pandemic resulted in a substantial blow to the economy. And now a year later restrictions stemming from the pandemic are still looming over us and many are greatly concerned about their financial stability and retirement savings. 

We are still seeing increased volatility in all economies as a result of these socioeconomic concerns. Americans who are planning for retirement may be uneasy about exposing their finances to these fluctuations.

Those in the pre-retirement phase of their life are especially concerned. Pre-retirees can be described as individuals who:

  • Are between 56 to 65 years of age
  • Are preparing for retirement
  • Have a net-worth of $1M+

With this in mind, we wanted to discuss our top 2 strategies that are well-suited for individuals in the pre-retirement phase and their specific needs and goals:

  1. Insured Family Legacy
  2. Life Insurance as an Asset Class

1. Insured Family Legacy

Every pre-retiree knows they have worked a lifetime to create financial security for themselves and their family. Many are living comfortably and have assets that they may not need to fund their retirement.

But, there comes a point in time when pre-retirees begin to worry about the legacy they’re leaving behind. Given the economic concerns that have arisen throughout 2020 (as well as the fact that Biden has stated he will increase taxes for high-income earners), how can we best prepare them now to pass their wealth on to their loved ones?

How it Works

With proper planning, it is possible for pre-retirees to utilize assets that are not needed for everyday living expenses and make more efficient use of them for the benefit of future generations, while still maintaining control over these assets. 

Life Insurance is a powerful tool that pre-retirees may utilize when planning a legacy for multiple generations. Pre-retirees may already be familiar with its primary use – providing money to their family or other beneficiaries after death. But the value of life insurance exceeds just that.

Permanent life insurance provides both death benefits and possibilities through cash value accumulation. If properly structured, it can positively meet the planning goals of multiple generations.

2. Life Insurance as an Asset Class

There are several factors that will affect pre-retirees' ability to pass on wealth to their family. When you set money aside to pass on to your family, there are several factors that can impact how well it performs in the marketplace as well as how efficiently it can be handed off to their family:

Market Volatility

The markets are constantly moving. Accessing funds after a market downturn has a compounding impact on your portfolio. The worst time to access funds is after a market correction.

Diversified Sources of Income

A diversified income strategy can help protect your portfolio against market fluctuations. This will allow you to balance the risk elements of your portfolio to help maximize long term returns.


You need flexibility to accommodate future changes in tax environment as well as the market environment. As tax rates change, having multiple sources of funds can provide that flexibility.

Managing Risk

Diversifying your investment portfolio between asset classes will help mitigate market risks. Just as you diversify during the accumulation years, it is prudent to do so during your retirement.

Advantages of Cash Value Life Insurance

One asset class many pre-retirees may have not considered is Cash Value Life Insurance. 

As you know, Cash Value Life Insurance can provide a guaranteed death benefit. The benefits are passed on to heirs tax-free and, if structured properly, are not subject to estate taxes.

In addition to the death benefit protection, cash value life insurance allows tax-deferred accumulation of cash values to provide income options for retirement, college funding, or other needs and objectives.

Learn More About our Proven Life Insurance Strategies

Post by Travis Pence
March 7, 2021