The more stable the sources of income, the more “stable” your client’s income will be in retirement. You can begin by asking your client what sources of reliable income they have, or what is their income stability percent? Income stability percentages are, in general, how much of the client’s needed retirement income will be stable and dependable. Your client can find the number by dividing the amount of guaranteed income they will have in retirement by the amount of income they will need in retirement.
Long-Term Care
Long-term care costs can create a significant income problem for the individual or spouse needing care as well as the survivor after the death of spouse who needed the care. Your clients might consider:
• Long-term care insurance to help cover costs
• Life insurance with a death benefit to the surviving spouse
• Products with built-in long-term care benefits or products that offer long-term care riders at an additional cost
After all, the depletion of assets during the care of one spouse can leave the surviving spouse in a difficult situation. Since the Tax Cuts and Jobs Act of 2017, the cost of creating after-tax money to purchase long-term care coverage is, for many taxpayers, lower than previous years.
Although the benefits or drawbacks of the TCAJ will be different for everyone, it’s important to work with your client to help them understand how the new tax environment may affect their specific situation. By providing strategies that can help them optimize their estate tax situation, you can significantly enhance your value as you work together to achieve their financial goals.
Kelly LaVigne is vice president of Advance Markets for Allianz Life.