When recommending a decumulation plan to a client, there are three key performance indicators (KPI) that should be considered. These include after-tax retirement income, pre-tax investment value, and after-tax estate value. Knowing what your client’s decumulation biases are (see What Matter Most above) will determine which KPI should be used in your analysis. For clients that have a goal to provide an estate for the benefit of loved ones, including a life insurance recommendation as part of a decumulation plan may improve overall results.
An Estate Bond is a planning concept that takes advantage of the tax-preferred treatment of permanent life insurance, but it is not for everyone. You need to weigh the pros and cons before recommending it to a client.
This Estate Focus Checklist will help to explain to a client how the concept works, and if it is something they may want as part of a broader decumulation plan.