As financial professionals, we work hard to limit our clients’ exposure to risk in retirement.
Increasingly, it’s not enough to simply focus on market risk or income risk – the traditional areas of financial planning.
In today’s volatile political climate, two new risks are more important than ever. And those two risks are closely aligned.
The first is Tax Risk.
Tax Risk is, simply put, the risk that your client’s taxes will not be significantly lower in retirement than they are today. How exposed is your client to Tax Risk? It depends how much of their retirement assets are in tax-deferred vehicles, like 401(k)s or IRAs. If like many Americans, the answer is “all” or “most,” then your client could be faced with a BIG tax bill in retirement if their taxes don’t go down. (How big a tax bill might they face? You can request a complimentary Stonewood report to find out.)
The second risk is Legislative Risk.
Legislative Risk is the risk that Washington changes the rules, and those changes negatively impact your client’s retirement income.
We saw a powerful example of Legislative Risk in September, as House Democrats unveiled a $3.5 Trillion spending bill that made significant changes to how IRAs, 401(k)s and even Roth accounts can be grown and taxed. You can check out the complete on-demand webinar Stonewood hosted on this legislation.
But I’ll give you the key takeaway here: IRAs, 401(k)s, and Roth accounts have a big bullseye on them, as our government looks to raise new tax revenue to fund runaway federal spending. As financial professionals, it’s up to us to help our clients understand this growing risk and prepare for it.
You can help your clients hedge against Tax and Legislative Risk by using IUL as part of their retirement approach. Whether you’re already talking taxes in your prospecting and client meetings, or you haven’t incorporated the tax story yet, Stonewood can help make mitigating tax and legislative risk a central part of your practice. Schedule a call to learn how.
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About the Author
Becky helps your clients outsmart Washington and take control of their retirement. Making the complex simple and meaningful? It’s all in a day's work.
