What if I told you that we had access to a magical CD for your clients’ “spare” money? When used, this CD has the power to address the major concerns your clients face as they age without forcing them to make any permanent commitments to leave their money in one place.
Imagine for a moment two options for your 50- to 70-year-old client. They currently have $100,000 of “what if” money that they can put into one of two CDs.
The first CD requires a two-year commitment and pays them a guaranteed rate of 1.5% per year. This investment will yield them $1,500 per year before it is taxed. There are penalties if your client takes the money back because a need arises.
The second CD earns no interest. Your client can take the money back at any time should the need arise. However, if your client needs long term care while the money is parked in the CD, the client’s money magically multiplies five times to provide $500,000 of funds to cover the costs. Should they pass away while the money is parked in the CD, the amount more than doubles in tax-free proceeds for their loved ones or their favorite charities. Again, they can get their money back at any time without penalties.
Given those two options, which CD do you think most of your clients who are approaching retirement would pick? Option two, right? In option one, your client might take home $1,100 per year after taxes. Would most of your aging clients buy $500,000 of long term care insurance and $250,000 of life insurance if it would only cost them $1,100 dollars a year? Of course they would.
The good news is that there is no magic here. That product actually exists. Too many advisors work to build their clients’ assets and help them approach their retirement goals but ineffectively hedge the assets against portfolio risk despite the fact that most clients have “what if” money just parked on the sidelines. Simply moving that money from one account to another can hedge their portfolio against the major risks that they will face in retirement: long term care expenses or premature death.
Call us today to learn how simple this strategy actually is.