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Retirement Planning > Retirement Investing

Using UL to enhance retirement finances

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Greg Gardner, CFP, with the Gardner Group in Dallas, provides the following example of how UL can improve a client’s retirement finances. The client was retiring at age 56 and his wife was 58. His retirement plan gave him the following choice: a single-life annual pension of $72,668 or a joint-life annuity of $56,681 — a difference of almost $16,000.
Gardner analyzed the options and suggested the client take the higher single-life amount and use $14,232 of the increased cash flow to purchase a UL policy with a $500,000 death benefit on the husband. Based on the following assumption, the results showed:

If the client lives to age 95, he will have total projected portfolio assets of $17,799,402 versus $17,050,139 from taking joint-life annuity.

If the client dies prematurely at age 70, his pension payments stop, but his wife receives $500,000. Assuming she lives to 2042, her portfolio assets will also be greater with the insurance option. Upon her death, the heirs receive $2,106,968 vs. $1,753,222.


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