Celebrate the Present, Protect the Future

This is the time of year for graduates and their family and friends to celebrate a milestone and look forward to future endeavors, whether that be the next level of academia or a new career path. Whatever the next step may be for a graduate, it is often marked by a greater degree of independence and responsibility. This is a great time to engage in financial strategies with young adults.  

Save for the Future 

For new graduates, the transition from school to their career is a very emotional period often marked by significant lifestyle changes. Despite all these adjustments, it is imperative for graduates to understand the importance of saving for their retirement early on in their career and not waiting. While they may be decades away from retirement, new graduates must understand how time serves as one of their most valuable assets. Even modest contributions made into a workplace retirement plan or an individual retirement account (IRA) early on in one’s career will often provide a higher balance at retirement than larger contributions that do not start until later in their career. Furthermore, vehicles such as Roth IRAs and Cash Value Life Insurance can be leveraged to provide tax-free income later in life¹.  

Protection with Life Insurance  

Many new graduates will bypass the opportunity to cover themselves with a life insurance policy through the reasoning that they are young and healthy and thus unlikely to need the coverage. In realty, their youth and health are what makes this period of their lives the most ideal time to protect themselves and their family with life insurance. By purchasing a life insurance policy at this stage in life, new graduates can lock in their insurability and take advantage of lower costs associated with their age. While significant obligations such as mortgages, spouses and children may not be apparent at this stage of life, a life insurance policy will provide new graduates with peace of mind that a plan is in place to provide this protection for these needs when they arise.  

Never too Young for Starting an Estate Plan 

During the celebratory season of graduation, many parents should consider the fact that they no longer have parental rights over their child and the significance of this. Generally, when a child turns 18 they are considered an adult and are in charge of their own future. This season can be a great time for parents to discuss the importance of basic estate strategies with new graduates. By establishing health care and financial Powers of Attorney, a new graduate can appoint someone (most commonly a parent) to be informed of and make both medical and financial decisions on their behalf in the event of their incapacity. While new graduates may not possess a lot of assets during the period immediately following their graduation, they are likely to accumulate over time as they progress in their career. Creating a will can help ensure that their assets are distributed according to their wishes to those that matter most. 

FINANCIAL CALCULATORS

Graduation the Goal?

In the event that you are meeting with or marketing to clients with children who will not be graduating soon, consider using the end-of-school-year conversation as a way to introduce parents to life insurance. By utilizing this flyer, your clients will be able to see the multitude of benefits that can be associated with using life insurance as a college funding strategy.

For more information about how National Life’s life insurance and annuity products may be utilized in the estate planning process, contact the National Life Sales Desk at 800-906-3310 Option 1.

National Life has also created an array of tools that can assist both agents and their clients with this process. You can access these tools on the National Life website through the link below.

https://www.nationallife.com/Financial-Calculators

1. The use of cash value life insurance to provide a tax-free resource for retirement assumes that there is first a need for the death benefit protection. Policy loans and withdrawals reduce the policy’s cash value and death benefit and may result in a taxable event. Withdrawals up to the basis paid into the contract and loans thereafter will not create an immediate taxable event, but substantial tax ramifications could result upon contract lapse or surrender. Surrender charges may reduce the policy’s cash value in early years.