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This post is an update from 2021

We’ve all heard the phrase, coined by Benjamin Franklin, “Only two things are certain in life: Death and Taxes.” I’d like to argue that in modern times there are three things certain in life, the third being: concerns about retirement. Regardless of how much your clients have saved, the fear of market volatility, increasing taxes and increased inflation is always looming in the back of their minds.

This is especially true if they plan on leaving a legacy for their children or grandchildren in addition to maintaining their standard of living throughout retirement. And now, more than ever, your clients’ fears could very much be a reality. Let’s review the financial landscape based on findings throughout last year:

Market Volatility

We are still seeing increased volatility in all economies because of various socioeconomic concerns. There are several risks that are at the forefront of investors' minds, including: concerns over continued regulation in response to the pandemic, inflation, supply chain disruptions and labor shortages. Americans who are planning for retirement may be uneasy about exposing their finances to fluctuations caused by these looming factors.

Increasing Taxes

On November 19th, the House of Representatives passed the Build Back Better (BBB) tax and spending proposal by a narrow 220 to 213 votes. The vote on the bill was held after the Congressional Budget Office (CBO) released its cost estimate for the bill. The CBO estimates the bill will cost almost $1.7 trillion and add $367 billion to the federal deficit over 10 years. However, by factoring in $207 billion of “non-scored” revenue resulting from increased tax enforcement within the Build Back Better bill, the net total increase to the deficit would be $160 billion. In other words, If the Senate passes this bill, the government will be collecting $207 billion in taxes in the near future.

Taxes may seem high now, but they can only go up from here. If you consider the highest marginal rates throughout history, tax rates right now are actually relatively low.

Furthermore, the government will eventually have to recoup the cost of all the stimulus and relief packages that were given out during the pandemic. With all that said, I think it’s safe to assume that taxes will be higher in the future.


According to a survey conducted towards the end of last year by Global Atlantic Financial Group, retirement age investors (ages 59 to 75) are concerned inflation could wreak havoc on their investments. The survey found that more than 7 out of 10 investors — 71% — said they believe rising inflation will negatively affect their retirement savings. As of October 2021, the inflation rate in the U.S. had surged to 6.2%, the highest since November of 1990. Moreover, the same survey found that 46% of investors said they believe rising inflation and low interest rates will make it more difficult to have steady income in retirement. Of those invested in fixed income, 46% said they are concerned about low interest rates affecting their retirement income.

Top Strategies for Pre-Retirees

Those in the pre-retirement phase of their life, who have been working hard to save for retirement and/or building a legacy to pass on to their families, are especially concerned by these factors. 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+
  • Have children and possibly grandchildren
  • Want to maintain their standard of living in retirement
  • Want to make sure their children/grandchildren will be financially secure

Last year we discussed how many Americans may not be aware of all the benefit life insurance can provide. With this in mind, I’m willing to bet that most of your clients may not now that life insurance, if properly structured, can mitigate all their concerns regarding:

  • Market Volatility: Fluctuations impacting their savings
  • Increasing Taxes: Difficulty accumulating savings
  • Inflation: Not having enough savings

Therefore, I wanted to discuss our top 2 strategies, utilizing life insurance, 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 the past few years, 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. If properly structured, life insurance can provide a guaranteed death benefit that is passed on to heirs tax-free and is not subject to estate taxes

Learn More About Insured Family Legacy

2. Life Insurance as an Asset Class

Life insurance plays an important role in any financial plan. It helps loved ones recover from financial risks and unexpected costs, increasing their chances of reaching long-term goals. There are two fundamental components of permanent life insurance that serve as a valuable asset:

  • Underlying cash values
  • Death benefit

Having the correct life insurance product and the appropriate amount of life insurance coverage in retirement will accomplish multiple jobs. It can help protect your income, provide tax-free cash flow, help manage taxes, provide peace of mind to families, and even improve your overall financial portfolio.

Learn More About Life Insurance as an Asset Class


Post by Travis Pence
January 14, 2022