Making a Bigger Nest Egg

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Almost every advisor I speak with is looking for new solutions and strategies to bring to their existing book of business. Here’s one strategy that you can use to start a new conversation with your current clients today.

Let’s get started.

The Problem: What if “live on” money becomes “leave on” money? If you’ve written a fixed index annuity in the last 10 years, chances are your client’s purpose for that asset was retirement income. But what if they no longer need that income? What if they haven’t turned on the income rider, or they’re letting it accumulate and using other assets for retirement planning?

If your client’s annuity has transitioned from a “live on” to a “leave on” asset for their family, the legacy they are trying to build could take a significant hit.

Depending on the ownership structure, the annuity could very well be taxed twice at death. How does a client avoid such a depreciation of what they leave behind?

The Solution: Annuity Maximization (annuity max) may sound fancy, but ultimately it’s just a way to reposition assets to better benefit your client’s estate or family. The goal of this strategy is to pass as many assets to your client’s beneficiaries as possible — and using life insurance is a critical part of this.

Clients are free to choose from two options with the annuity max concept: They can move an annuity into an SPIA (which will then fund a life insurance policy with a high death benefit), or they can use the existing withdrawals on their policy to fund a life insurance policy (this policy’s resulting death benefit passes tax-free to the beneficiaries).

In a scenario I came across last week, two clients, age 62 and 65, had a $750,000 annuity with a $400,000 cost basis. By moving their money into a more tax-efficient strategy, their beneficiaries would’ve netted about $700,000 more in inheritance.

How many more referrals would you get from that family if you provide this type of solution?

Next Steps: What type of client are you looking for? How can you identify the one that will be receptive to the annuity max idea? Look at clients that are 65 to 85, relatively healthy, and looking to leave as much as possible to their children, spouse, or favorite charity.

Starting a conversation about this solution, especially with the clients already in your book of business, is remarkably easy.

Here are some questions to start asking current clients:

  • Is your deferred annuity filling an income gap in your retirement, or are you earmarking this for your kids?
  • Did you know your beneficiaries could lose anywhere from 15% to 70% of that annuity’s value when you pass away?
  • Are you open to looking at other solutions that position your money to better safeguard what you’ve worked hard for?
  • Do you think your family would appreciate a larger nest egg?

This approach provides a significant tax advantage when your clients pass and provides you with another reason to reach out to them to help safeguard their assets. Let’s help your clients keep Uncle Sam out of their hard-earned legacy.

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Stephen Odom, CEO of The Impact Partnership


Chief Executive Officer

Stephen started in the insurance marketing business in 2001 as a new business consultant. In 2002 he was promoted to Director of Sales and built a 200 million book of business from scratch. By 2005, he was one of the top wholesalers in the country, working with some of the top financial advisors and insurance agents across the USA. In 2008, Stephen was promoted to Co-President of one of the largest IMOs in the country.

In 2011, Stephen continued his entrepreneurship path and co-founded The Impact Partnership, an INC 5000 company. Stephen is responsible for the strategic vision of Impact and is laser-focused on creating a culture of growth for both internal teammates and our amazing customers.

Stephen lives in Kennesaw, GA, with his wife of more than 20 years, Kendra. They are blessed with three beautiful children Katie, Tyler, Anna Brooke, and Laya, their German Shepherd and Luna, their BernieDoodle.