Whole Life: The Key to Unlocking your Retirement

Over the years, you have been taught that your retirement nest egg has a large ‘DO NOT TOUCH’ sign attached to it until retirement. Even at retirement, people hesitate to spend their nest egg for fear of running out of money.

So what happens if you remove that sign and crack that egg open?

Plenty of retirees have done just that and are fully enjoying the benefits of their hard-earned money. After spending years saving and accumulating assets, many people find themselves budgeting more in retirement than in their working years, often spending only the gain on their savings to avoid spending principal.

So how are the people who are enjoying their assets in retirement doing it?

There are pre-conceived notions that the best way to prepare for retirement is to invest heavily, max out your 401(k), and rely on Social Security and — if you’re lucky — a pension. However, there is an additional step to achieving an enjoyable and secure retirement. It involves whole life insurance, used in a way you’ve probably never thought of before.

Unfortunately, many people believe that once their kids are grown, they should drop their life insurance policy to save and invest the money they were spending on premiums. But the loss of their life insurance death benefit from their balance sheet may have a significant impact on their ability to access other assets in retirement.

What they do not realize is that they are losing much more than just the death benefit associated with the life insurance policy; they are losing the freedom to live their retirement life to the fullest. Rather than looking at whole life as a cost, it is important to see it as an asset with a promise.

The examples below show what cumulative retirement assets might look like after a 30-year period. If you do not have a life insurance policy in place, you may look to spend little or no principal to avoid running out of money. However, when you do have life insurance, you are able to spend both the principal AND interest, while having a guaranteed legacy for your family in place, provided by the guaranteed death benefit of whole life insurance.

*This hypothetical example is based on a male, age 35, who retires at age 65 and lives until age 85 with a rate of return of 6% in a 35% tax bracket. The hypothetical example does not represent the performance of any particular financial product or security.

Rather than looking at whole life as a cost, it is important to see it as an asset with a promise.

A New Perception, A New Promise

With whole life in place during your retirement, you no longer have to keep your money locked away and are able to enjoy your wealth without restraint. It sits behind all of your other assets, always there with the promise that it will pay a benefit at your death. Without having the concerns of legacy planning, you can access your other assets more freely – both the principal and its earnings.

The bottom line: A retirement that includes whole life insurance is better than one that does not.

By integrating whole life into your overall retirement strategy, you are given the unique combination of having the freedom to spend your retirement assets how and when you want while putting in place a secure legacy plan for your loved ones. Being able to maintain your accustomed lifestyle into your retirement years and even increase your post-retirement income without worry is the ultimate goal.

The Living Balance Sheet® and the Living Balance Sheet® Logo are registered service marks of The Guardian Life Insurance Company of America (Guardian), New York, NY. © Copyright 2005-2015, The Guardian Life Insurance Company of America. Pub6948 2015-4742 Exp. 4/17

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