IN OUR LAST TWO ARTICLES (PART I, MAY 2021 & PART II, AUGUST 2021), WE DISCUSSED THE THREE MOST SIGNIFICANT RISKS TO YOUR RETIREMENT PLAN.
+ Simply put, not having enough money to fund your retirement goals.
+ According to one of the largest 401(k) providers in the country, 74% of your income in retirement is driven by how much you invest and only 26% is a result of where you invest.
+ Can you predict your retirement tax rate? How much will the government take? 30%? 50%? More? This gets even more complicated when you consider that your retirement can stretch 25 years and longer.
+ Given current tax proposals, tax rates are not likely to go down for most people.
+ If you have been in the stock market, you have lived through this risk! Avoiding large losses is key.
+ Think about it, if you are down 50% at any given time, you will have to make 100% just to get back to break even.
In Part I, we focused mostly on Capital Risk and in Part II, we primarily covered tax risk. In this final part, we will focus on investment risk, mainly as it pertains to retirement planning.
Many of us remember the 2008 crisis when 40%+ of market value was lost. Since then, we have enjoyed one of the longest bull markets in history, with many quickly forgetting risk is not always rewarded. The current interest rate environment is low, making bonds and fixed income investments unattractive, but do not forget that when interest rates go up, the bond value itself goes down. So much for protection and the old 60/40 rule. There are storm clouds ahead that traditional retirement tools are not prepared for.
#1 Financial Fear is not having sufficient savings in retirement to maintain lifestyle.
So, what should you do?
Due to limitations, traditional retirement plans are typically insufficient for high-income earners. If you want to maintain your lifestyle in retirement, you need a proactive strategy that puts more money toward protecting your future income without putting a drain on your current finances.
Everyone wants to invest like the wealthy.
Most believe the wealthy make risky investments to achieve their wealth.
Did you know...many wealthy families have been investing money in life insurance policies that have cash accumulation features.
Kai-Zen is a strategy uniquely designed to combine the advantage of leverage with the cash accumulation features of life insurance. Enhancing the potential to supplement your income, while providing more protections for you and your family. And while your cash is indexed to the market, it has no downside market risk. No negative returns! Ultimately, the strategy can provide 60-100% more TAX-FREE retirement income as compared to traditional investing.
Kai-Zen is a strategy variation that has been previously only used by wealthy families ($10m+ net worth) and has been used since the 1960’s.
To learn more, please contact us with any questions. 303.645.4800, Impact@ImpactWealth.com
YOUR IMPACT WEALTH TEAM
The pain of losing is psychologically twice as powerful as the pleasure of gaining.
—Kahneman & Tversky, 1979