Do Your Clients Know the Impact Health Care Costs Could Have in Retirement?

There is a thief in the night waiting to take your client’s hard-earned retirement savings. Retirement is not for the faint of heart, and may come with market risk, inflation, taxes, and the threat of long-term care are just a few examples.

These expenses, however, generally come as no surprise to many Americans (though they may be surprised by their impact).

But there is one expense that is almost always unexpected (and unheard of) called IRMAA, which stands for Income Related Monthly Adjustment Amount. Moreover, this could represent one of the highest costs in retirement. When the reality of its actual cost sets in, it may cause panic and a tremendous sense of urgency to try to fix it.

Did you know –

There is a federally mandated Medicare surcharge that your clients could face in retirement? 

This charge could potentially be hundreds of thousands of dollars that they did not plan for. In addition, agents and other financial professionals may also be unaware.

A single dollar of taxable income can be taxed multiple ways?

That’s right not just once but multiple times.

That in addition to providing a death benefit, permanent life insurance has the potential to accumulate cash value that could be accessed by using income tax-free policy loans and withdrawals, that could be used for retirement income or other needs. 

You can help your clients address the issues above¹. In addition to Roth accounts, both employer and individual, as well as specific annuities, and certain types of life insurance could act as a solution to protect against IRMAA. Make it a priority to educate clients about the benefits of a Tax-Free Retirement Strategy using permanent life insurance that can also protect against IRMAA.

1. The use of cash value life insurance to provide a tax-free resource for retirement assumed 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 contrast lapse or surrender. Surrender charges may reduce the policy’s cash value in early years.