Designing a Safer, Smarter Retirement Strategy

You worked hard, saved your money, secured a company pension, built up a 401(k), and invested well. In short, you made all the right choices in planning for retirement. But that was then; this is now. The stock market's collapse since 2007 has pummeled Americans' retirement accounts, wiping out more than $3 trillion in value, by one estimate.¹

If that weren't worrisome enough, retirement expenses are also growing by the year. Our life expectancy continues to increase — 77.7 years and rising, according to the federal Centers for Disease Control and Prevention² — while the cost of living keeps going up as well. This means your retirement years are likely to be longer and more expensive than you thought.

Facing these unnerving facts, people who once invested heavily in the stock market are now playing defense in their retirement planning. Many Americans appear to be fleeing stocks and shifting more of their nest eggs to cash and fixed-income instruments in response to the latest downturn.³

Spreading the Wealth

Most financial professionals agree that a prudent strategy for limiting vulnerability in volatile economic conditions is to spread one's assets among a range of investments with varying levels of risk. Yes, stocks may still be part of the mix, but so may bonds and fixed annuities.

For people that have a "rainy day fund" with no immediate need for it — and want death protection — the answer may be life insurance. A single-premium universal life insurance policy such as New York Life Insurance and Annuity Corporation (NYLIAC)'s⁴Instant Legacy^TM is designed to guarantee* a financial legacy for the policyholder's heirs, generally free from federal income tax, while also providing a number of "living benefits." One of the living benefits such policies offer is access** to your money when you need it, provided that your death benefit protection needs have decreased. In uncertain times, you may want to consider this kind of flexibility.

This educational third-party article is being provided as a courtesy by New York Life Insurance Company. For more information on this topic, contact me.

* Guarantees backed by the claims-paying ability of the issuer.

** A policy's cash value may be accessed via policy loans and/or partial surrenders. Policy loans accrue interest at the current rate. Loans and partial surrenders reduce the death benefit and cash value. Policy loans and withdrawals may be subject to regular income and may carry a 10% IRS penalty tax if the policyowner is not yet 591/2.

¹ The Urban Institute, "How Is the Financial Crisis Affecting Retirement Savings?" by Mauricio Soto, March 10, 2009, http://www.urban.org/publications/411847.html

² Centers for Disease Control and Prevention, "Deaths, Final Data for 2006," April 2009, http://www.cdc.gov/nchs/fastats/lifexpec.htm

³ The New York Times, "When Nest Eggs Change Colors," by Paul J. Lim, April 4, 2009, http://www.nytimes.com/2009/04/05/your-money/05fund.html

⁴ NYLIAC Instant LegacyTM is issued by New York Life Insurance and Annuity Corporation (A Delaware Corporation), a wholly owned subsidiary of New York Life Insurance Company.

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