Healthcare Costs Eat Retirement Income

On August 24th, 2017, Fidelity Investments released its annual health care estimates. They stated that a 65 year old couple retiring this year will need $275,000 to cover health care costs through retirement. They also showed that this number is 6% higher than last year, and that a single person will pay about half that amount. This cost number includes your basic Medicare premiums, Medicare Part B, drug plan and also your Medicare Supplement ort Medicare Advantage type programs. But this number does NOT include dental care, nursing homes, and/or long term care costs. The report was very interesting and also provides information that should be given to our clients and prospects. The question is, "What can we do to help our clients regarding these daunting numbers?" Let's look:

From my perspective, the bottom line for most people is needing to "play it safe." They need a nest egg that will be there when they need it. For most Americans, this is no time to gamble. Our clients also need an income account that could continue to grow, regardless what happens with the stock market. They should probably have these accounts laddered to handle different needs and different time periods. We have exactly that with fixed index annuities with guaranteed lifetime withdrawal options or riders. There are income riders that can continue to grow even when you are taking funds for their retirement income. Other needs? Read on…
 
Sorry to be blunt, but we are going to die. As we get older, it is not a question of "if," but "when." Where will your clients get the money for their final expenses? We see the articles that show the average costs around $10,000. Having lost my wife, I can tell you that the number became much larger than that. Having good life insurance, that was all taken care of. Approach your clients and at least get them a simplified issue life policy. No exam, table 4, and easy to buy. We can handle that final expense with discounted dollars so they don't have to raid the retirement piggy bank.

What else? Glad you asked. What about a simplified issue single premium life policy (no exams and even online instant issue) where we really lever up the premium! A 65 year old female, placing $100,000 of premium would get a death benefit of around $190,000 or a lot more with full underwriting. Remember when Fidelity said that the $275,000 did not cover long term care type expenses? Well, these policies, with accelerated death benefits, will pay the insured the death benefit prior to death if they can't perform 2 of the 6 activities of daily living. Oh yes, payment of the premium, where does that come from? Let's look:
 
Let's say the client does not have the extra capital to place in the single premium life policy. Well, if they have annuities, they have the answer and their bank is open. Simply exercise the right of the 10% free withdrawal and buy a small single premium life policy or spend about $1,200 per year for a $20,000 policy.

Here’s the bottom line: there are plenty of ways to help your clients, there are plenty of products to fit the bill and there is The Ohlson Group that can show you how to structure the entire assessment and recommendation process. Oh yes, what about closing? Some people may need a nudge. But when they become part of the process, the presentation is real and relatable, so it doesn't take much else to close.
​
Give us a call. Ohlson Group... since 1975 and still... a different experience.

---

Until next time… good selling!
​
Raymond J. Ohlson
Founder & Retired CEO
Ohlson Group
​1-877-844-0900