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2.jpg) Baby Boomers entering the distribution phase stand to lose a significant portion of their retirement savings if they don’t employ proper exit strategies.
IRA Expert and Author Ed Slott encouraged financial advisors to help Baby Boomers protect their portfolios against the retirement savings “Time Bomb” by being proactive in coordinating the following tax code benefits into an estate and distribution plan:
- Tax exemption for life insurance
- Estate tax exemption
- Extended tax deferral for inherited/“stretch” IRAs
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In addition, many people don’t recognize that strategies that helped them while they were building wealth can actually increase risk during the distribution phase, according to Boomertirement presenter Michelle L. Hoesly, CLU, ChFC – Principle, Capital Resources, and 28-year MDRT member. Those strategies and solutions include:
Strategies That Can Be A Problem In Retirement
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Better Solutions |
Reverse dollar cost averaging |
Investment vehicles with a variable withdrawal strategy implemented automatically.
Retirement money invested in “buckets” (time periods) with the near-term buckets invested in guaranteed income products, while the later buckets are equity focused. |
Always deferring taxes |
Employ teams – including tax accountant, attorney and financial advisor – that can provide joint advice. |
Riding out the market with an asset allocation strategy |
Diversified investment strategy – not just diversified asset classes, and use of guaranteed income benefits via variable annuities. |
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Boomertirement Session: Exit Strategies for Retirement Savings |
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