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Copyright 2016 Financial Scenarios LLC. All Right s reserved.
This is a relatively new word, coined about funding ones retirement. Decumulation is
the process of converting pension savings to retirement income.
The big question is:
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.
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?
Copyright 2016 Financial Scenarios LLC. All Right s reserved.
In the Decumulation phase, three things tend to happen to compound the
First, since the retiree is now no longer adding additional 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.
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.
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 as well as 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 actual returns
the moneys actually earn.
The Best Decumulation Solution:
The Best Supplemental Retirement Plan of the 21
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
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.
Note: This plan is only available through a state licensed life insurance agent!