Integrated Planning Strategies

Decumulation

What is the best Decumulation product available today?

Building up a pot of money for retirement is done during the “Accumulation Phase.” Using that money for income would be the “Decumulation Phase.” Decumulation is a relatively new word which refers to funding one’s retirement. Decumulation is the process of converting pension savings to retirement income. Most of the funds set aside for retirement by individuals are generally placed into mutual funds, which are supposedly by design, diversified plans that take advantage of the growth of the market with some degree of safety.

The Decumulation Phase is where the real opportunity for failure can occur in most retirement plans. During the accumulation phase, while the markets always go up and down, the money added every year to the savings plan tends to help camouflage somewhat the downturns in the market.

Another larger problem is the returns on safer investments have gone down dramatically in recent years.  The once thought of 4% rule (living on 4% of your money to make it last your lifetime) has now become the 2% rule!

So, how can we fix this and what can we do about it?

In the Decumulation phase, three things tend to happen to compound the problem:

  1. First, since the retiree is now no longer adding funds to the plan but is doing the reverse of that, He or She is now taking funds out of a potentially ever shrinking plan to use for income.
  2. Second, the retirees are coached to move their money into safer allocations and maybe even move a good bit of it into fixed annuities, which usually means they will be getting lower returns overall.
  3. Third, at the same time, any monies they leave in the market (even though it is supposedly in a “safer” allocation) are still at risk. In addition, your monies are subject to the ongoing expenses that mutual funds have been known to charge, somewhere in the 2% to 4% range annually without taking into consideration the returns the money actually earns.

The Best Supplement Retirement Plan!

  • It starts with a New Generation Life Insurance product.
  • The Savings Element is not subject to downside risk.
  • When tied to the S&P 500 it can currently safely earn as much as 13.75%.
  • Has a 3% underlying guarantee.
  • When the money is taken out correctly, the income producing account never goes down in value to provide maximum income growth potential.
  • If set up during the accumulation phase, the money can come out tax free (provides a 25% to 40% or more increase in income).
  • Includes Chronic Care Insurance (Cash benefit).
  • Includes Critical Care Insurance (Cash benefit, in most states).
  • Any Residual left in the account at death is passed on income tax free to the Beneficiaries.
  • Overall annual expenses can be 1/10 to 1/3 of the cost of the average mutual fund.

Ask us questions and get real answers.

Call Integrated Planning Strategies for a complimentary consultation to discuss your planning needs.

(314) 489-4019