Blog #169: The Hidden Partner
(Part 2 of 2)

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Bob Ritter's blog 168 image 1 The Hidden Partner devil (the Internal Revenue Service) image

 

Blog #169 (Part 2 of 2) follows up on its Part 1 predecessor where the income tax strategies outlined in Part 1 are put into practice in an actual, retirement planning case study.  The short-, mid-, and long-range net worth and retirement cash flow for a pair of top-tax-bracket married doctors are compared using Indexed Survivor UL vs. their various liquid assets (including their retirement plans).  Some of those same liquid assets are alternatively converted to an income stream that funds the Indexed Survivor UL bearing annual premiums of $134,892.

Long-range, Strategy 1b has over $11 million more in net worth and over $3 million more in spendable, retirement cah flow.  The additional net worth could easily accommodate a significant increase in spendable, retirement cash flow or, perhaps, a serious, gifting program for children or favorite charities.

Blog #169 further compares the results in various higher and lower tax brackets in order to demonstrate the variable outcomes of the asset based plans vs. the life insurance based plan.  None of the alternatives stands a remote chance of competing with the life insurance.

You can read the rest here: Blog #169 . . .


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Blog #168: The Hidden Partner
(Part 1 of 2)

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Bob Ritter's blog 168 image 1 The Hidden Partner devil (the Internal Revenue Service) image

 

The accumulating assets in tax deductible retirement plans reflect unrealistic values since they are subject to a deferred income tax.  It is surprising that banks, federal and state regulators, and CPAs allow clients to show their net worth statements with the gross retirement plan amounts (since there is no way to avoid the tax during the client’s lifetime or at death).

Welcome to the world of those with money in deductible retirement plans (close to $24 trillion and counting), all of whom are sharing a major portion of their retirement assets with the Hidden Partner (the U.S. Treasury via its collection agent, the Internal Revenue Service).

Blog #168 explores the impact of subtracting the mandatory deferred income tax from the client’s net worth statements (and why it’s important that you provide your clients with this information).  We then compare a tax deductible retirement plan to a cash value life insurance policy funded with premiums equal to the after tax contributions to the deductible plan.  The results are impressive.

You can read the rest here: Blog #168 . . .


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Blog #167: The Retirement Cost of Ignoring Life Insurance
(Part 2 of 2)

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Bob Ritter's blog 166 image 1 a self-employed clinical psychologist is planning to start an IRA

 

If your clients ignore life insurance in their retirement planning, they are essentially saying, “I am not interested in maximizing my spendable retirement cash flow.”  Read on for the proof!

Blog #167 evaluates a Roth IRA vs. IUL.  Similar to Blog #166 (Part 1 of 2) where we compared IUL to an IRA, the results of the Roth comparison provide huge motivation for redirecting to IUL the after tax cost of contributions funding any Roth IRA or Roth 401(k).  The IUL logic develops either more net worth or more spendable cash flow while requiring no additional contributions.

You can read the rest here: Blog #167 . . .


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Blog #166: The Retirement Cost of Ignoring Life Insurance
(Part 1 of 2)

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Bob Ritter's blog 166 image 1 a self-employed clinical psychologist is planning to start an IRA

 

Note:  If your clients ignore life insurance in their retirement planning, they are putting their spendable retirement cash flow at risk.

Blog #166 evaluates an IRA vs. Indexed Universal Life (“IUL”).  While it is a relatively small case, the analysis provides huge motivation for redirecting to IUL the after tax cost of contributions funding any IRA, Keogh, 401(k), 403(b), and Profit Sharing Plan.

The logic develops “free money” meaning either more net worth or more spendable cash flow while requiring no additional contributions.  It makes no difference which deductible retirement plan is evaluated.  In most cases, IUL outperforms them all.

You can read the rest here: Blog #166 . . .


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Blog #165: Lobsters for Retirement

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Bob Ritter's blog 165 image 1 lobsters for retirement lobster boat

 

Blog #165 evaluates a retirement plan for Harry and Paige Foster, both age 45, and operators of a lobster boat out of Bass Harbor, Maine.  As you can see below, their current plan is not sufficient to meet their cumulative retirement cash flow goal of $5,037,432 from age 65 to 90.  Neither is their revised plan which involves downsizing their home at retirement in order to free up additional capital.

Once again, Indexed Universal Life (“IUL”) comes to the rescue with no additional out-of-pocket cost for the Fosters.

You can read the rest here: Blog #165 . . .


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Blog #164: Family Net Worth™
(It’s Irresistible!)

Part 2 of 2

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Zoe (she is Irresistible!), Blog #164: Family Net Worth (It’s Irresistible!)

 

Blog #164 introduces a Charitable Foundation that adds to the Family Net Worth™ controlled by the Baxter family that was introduced in Blog #163.  This new planning concept is included in the recently-released Version 13.0 of Wealthy and Wise®.

Blog #163 is necessary reading to fully understand Blog #164.

You can read the rest here: Blog #164 . . .


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Blog #163: Family Net Worth™
(It’s Irresistible!)

Part 1 of 2

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Zoe (she is Irresistible!), Blog #163: Family Net Worth (It’s Irresistible!)

 

Family Net Worth™, the combined net worth of more than one generation (i.e., a family group) is not historically associated with wealth management and estate planning.  It is an important concept when assessing the short-, mid-, and long-term potential of wealth accumulation and asset transfer.  It has a particular application when a significant portion of the parents’ wealth is passed to children during the lives of the parents.

Family Net Worth as a new category of wealth is analyzed in Blog #163 where you will get a first look at how we have integrated this new concept into Version 13.0 of Wealthy and Wise®.

You can read the rest here: Blog #163 . . .


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Blog #162: Creative Financial Presentations

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The basic life insurance illustration has lately become a compliance document.  I saw one recently with 52 pages, some of which were close to incomprehensible.  Part of the problem is that the basic illustration must serve too many masters: legal, actuarial, sales, and, often excluded, artistic.  Fortunately, InsMark’s supplemental illustrations deal only with sales and artistic.

Deciding just how much information you want to convey to a prospective client requires some serious thought.  The decision is typically based on your and your prospect’s comfort zone which are not always in sync.

Blog #162 introduces you to several presentation techniques based on your and your client’s desire – or lack of desire – for detail.

You can read the rest here: Blog #162 . . .


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Blog #161: Self-Financed Life Insurance
Meets Wealthy and Wise® (Part 2 of 2)

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Bob Ritter's Blog #161: Self-Financed Life Insurance Meets Wealthy and Wise (Part 2 of 2) image

 

In Part 1 of this series, we illustrated an effective use of Loan-Based Private Split Dollar with five annual premiums coupled with Wealthy and Wise®, our wealth management system.  One of the difficulties associated with this concept involves the selection of the appropriate Applicable Federal Rate (“AFR”) for the loan interest rate for loans expected to be in force for a significant number of years (longer than nine).  In April 2017 (the date of the illustration), the tempting short-term AFR was 1.11%, but due for renewal every three years at unknown future rates.  The long-term AFR was 2.82% and, while locking down the AFR for one premium, the remaining four premiums also faced unknown future rates.

The solution provided in Blog #161 (Part 2 of 2) involves use of a Premium Reserve Account with a one-time loan that establishes a sinking fund to feed out the premiums at a rate of one each year.  This procedure not only avoids MEC status, it provides a lock-down of the current long-term AFR of 2.82%.

The Premium Reserve Account is a valuable contributor to financial results that are very similar to those in Part 1 of the series.

You can read the rest here: Blog #161 . . .


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Blog #160: The Benefits Of Collaboration

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Bob Ritter's blog #160: The Benefits Of Collaboration highfive with puppy and girl

 

As you may know by now, we have recently launched a new program called the InsMark Advanced Consulting Group or “ACG”.  The basic idea with ACG is to connect life producers who are experts in certain niche markets with other producers for joint business.

Today, it’s nearly impossible to be all things to all people when it comes to sophisticated life insurance planning.  With strategies such as premium financing, bank-owned life insurance, COLI and pension restructuring, it’s rare that one firm can provide every possible solution . . . especially when those solutions require specialized expertise to present, close and service.

If you don’t have those specific capabilities for a certain advanced sales concept, it could be very profitable for you to have a group of niche experts that can be added to your planning team. . . instantly.  That’s ACG.

To learn more now, just go to the ACG Landing Page.  Also, see below for an upcoming webinar we have scheduled to explain more about the ACG Program.

You can read the rest here: Blog #160 . . .


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