Broker Check

Asset Protection

Per a quote from Ralph Waldo Emerson,

    --  "It requires a great deal of boldness and a great deal of caution to make a great fortune, and when you have it, it requires ten times as much wit to keep it."

Protecting your assets and income during retirement years is one of the most important planning goals all retirees and seniors should exercise. The are many areas to protect against, but the main three are market losses, liability losses and long term care expenses.

Concern for safety and security has always been a characteristic of pre-retirees and retirees, who place an increased priority on the preservation of assets. In the wake of September 11, and continuous stock market fluctuations, the popularity of so-called "safe-money" investments has skyrocketed. But what is "safe"?  Banks have always provided the "safe money" alternative. However, with interest rates reaching a 40-year low and the national average yield of a two-year CD less than one percent, there is tremendous importance on finding other products that will help protect and grow your money.

Fortunately, there are still some unique investment strategies that allow you to earn competitive interest rates on your money during your retirement years and still be protected from any losses. These unique strategies are designed to allow you to participate in market gains, lock in any interest earnings every year which can never be lost, and avoid any losses in negative years.* Thus, you can continue to allow your money to earn competitive rates during your retirement years without subjecting your assets and savings to market risk, which may be important in today's fluctuating economical times. No one knows exactly how long they will live, so it is necessary to keep your money growing competitively to keep up with inflation as to prevent outliving your money, but yet we have to invest wisely to prevent from suffering from detrimental losses during the retirement years.

Liability losses can also be detrimental. Accidents happen all the time. As we get older, we are more prone to causing accidents. In today's sue happy world, one could lose everything from one small, at-fault incident. Make sure that you consider liability protection in your retirement and estate planning and protect your estate the best way that you can during your retirement years. You can do this by investing and having your money allocated in the right type of asset vehicles that offer liability protection. You also should look into obtaining an umbrella policy. Umbrella policies can be obtained from your homeowners insurance company; in most cases, they are very inexpensive and will give you some valuable protection during the retirement years when you are more prone to being sued.

The number one cause of financial ruin during the retirement years, however, is a long term care illness. Long term care is a very serious issue today and costs continue to rise rapidly. The risks are now one in two, which means that you or your spouse will probably need some form of long term care in your lifetime. Nursing home care can be quite costly and home care can be even more expensive. It is absolutely vital to address this issue in your planning. Obviously long term care insurance is one solution to protect your assets, income and estate from these high costs and expenses. Long term care insurance allows you to transfer the risk of these expenses to an insurance company. As you probably know, long term care insurance can be expensive.  A lot of people are hesitant to purchase long term care insurance because they fear they will never have a long term care illness and they would have wasted all that money in premiums. But there are ways to protect yourself from a long term care illness without having to pay annual premiums for insurance. Again, it is vital to address this issue as to find the best and most economical way to protect you and your family's assets, income, and estate the proper way for your specific situation and circumstances.

*  This refers to an insurance product backed by the claims paying ability of the issuer.  Limitations, fees, and restrictions may apply.