Is your Retirement Portfolio Protected Against Market Volatility?

Have you considered what would happen if the stock markets were to take a downturn shortly after your retirement? Traditional market-based retirement investments are critical to addressing benefit shortfalls, inflation and the potential for living longer in retirement, but a well-rounded portfolio should also include a portion not directly tied to the market to help protect against market volatility.

Recently, I had a client come to me for risk management advice. After discussing his income and asset protection needs, we got to talking about retirement. He is already maxing out his 401(k) plan and IRA / Roth IRA options, but he expressed concerns about market volatility in retirement. Like many Americans in 2008, he watched the value of his market-based investments decline 38 percent and has been watching their value slowly rise ever since.

Together, we came up with a solution to help diversify his retirement portfolio outside of the market. A properly designed cash accumulation life insurance policy gives high income-earners, like my client, the flexibility to diversify distribution of income at retirement. By borrowing against the cash accumulations of this life insurance policy for 1-3 years after a down market, instead of withdrawing from a 401(k) or other market-based retirement investment (resulting in compounded losses), he can provide his investments the necessary time needed to recover.

These life insurance policies also offer a host of benefits including income tax-free distribution, a death benefit for added protection for his family during his working years, and often additional “living benefits.”

This supplemental retirement funding technique can help individuals address the uncertainties of the market in retirement.  You can read more about this technique in the Forbes article “How Life Insurance Can Help You Hedge Against Market Volatility” or contact me at to learn more.