One of the best retirement income analogies I’ve heard is that of the “back nine.” In this analogy, Dave Zander of Back Nine Financial says that a round of 18-hole golf is a lot like life itself.
- The front nine is like the first part of your life, when you’re employed and actively earning new income every year.
- The back nine is retirement and the rest of your life; it has the same traps and hazards as the first nine, and you need the right tools to navigate the course – but where is your new income?
Open any newspaper or financial publication and sooner or later, you’ll read an alarming report: There is a looming crisis in the retirement sector as baby boomers start to enter their retirement years and have underfunded nest eggs.
In other words, we’re forgetting that we still have to play the back nine.
In the overall investment market, most clients tend to be conservative because they don’t want to risk their savings and future income. Unfortunately, risk-averse investing can overcompensate and lead people — and their advisors — to put all their investments into fixed accounts that don’t give the return they truly need.
The best way to help your clients — particularly the “sandwich earners” in the $200,000 income bracket — is to guide them to a product designed to safely and efficiently accumulate wealth.
The right product
Global indexed universal life could be the most appropriate investment vehicle for your clients who aren’t yet saving enough and still have time to allow wealth accumulation features to kick in. It’s a different asset class that people can have in addition to stocks and bonds – an insurance product with upside potential and a guarantee.