One of the problems with most retirement plans today is they address only two of the three key issues. The two that are typically addressed are:
- Pre-retirement asset allocation;
- Post-retirement asset allocation.
The one usually not addressed is:
- The order in which assets are accessed for cash flow that produces the best long-range net worth and wealth to heirs. We call it Good Logic vs. Bad Logic™ when it is done efficiently.
When cash flow is needed, advice that determines which assets should be accessed, and in what order, is vitally important. Why is this typically overlooked? It’s simple -- with, say, five different asset classes and 30 years of cash flow, 3,600 calculations are needed to determine the best order. With six assets, 21,600 calculations are needed; with seven, 151,200. This is not something that can be handled by a simple Excel spreadsheet.
We built an algorithm in InsMark’s Wealthy and Wise® for this very complex calculation, and the results are dramatic as you will see.
Don Prehn and Steve Savant, both consultants to InsMark, have created a very interesting video that discusses this issue in two segments. The first segment is 6 minutes concluding with the second segment of 5 ½ minutes. Normally, I would present each one in successive blogs, but the information is so sequential that they flow better if shown together. You’ll be glad you watched them both.
Click on the image below to begin the video.
The two major takeaways I want you to have from both video segments are:
- There is a significant increase in both net worth and wealth to heirs that is created through the application of Good Logic vs. Bad Logic™;
- Reallocating current assets to purchase an investment grade life insurance policy usually produces a meaningful increase in net worth or retirement cash flow -- or both.
| Life insurance has been traditionally viewed as “expensive”, but the client’s perception is markedly different when the results shown in the video can be achieved. Below is a quote from an article in the December 2014 issue of Trusts & Estates by Bill Boersma entitled “Life Insurance as an Asset Class” in which he states: |
| “I can only wonder if another asset with the same qualities would be implemented more frequently if it wasn’t called life insurance.” |
If you would like to review more details of the material presented in the video, please go to Blog #35: Revisiting the Pothole in Wealth Planning and Blog #71: When Life Insurance Doesn’t Work — or Does It?
InsMark’s Digital Workbook Files
If you would like some help creating customized versions of the presentations in this Blog for your clients, watch the video below on how to download and use InsMark’s Digital Workbook Files.
Digital Workbook Files For This Blog
Download all workbook files for all blogs
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Note: If you are viewing this on a cell phone or tablet, the downloaded Workbook file won’t launch in your InsMark System. Please forward the Workbook where you can launch it on your PC where your InsMark System(s) are installed. |
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