Finding Cash Flow from Passive Income Sources

It is extremely desirable for retired clients to produce passive income — cash earned without too much effort. These revenue streams, universally loved by financial advisors, reduce the pressure to sell equity stock positions too aggressively or rely upon favorable but conservative yields on bonds.

Eight Passive Income Ideas for Retirees

The NewRetirement planning blog identified several passive income sources for retirees to enhance their financial security, including the following:

1. Generate passive income with a home or property by renting a room, turning a vacation property into a short-term rental or even leasing access to a driveway as a parking spot.
2. Rent fun luxury possessions, such as an RV, high-end sports equipment or the family boat.
3. Invest in real estate rental property, high-yield real estate investment trusts or private real estate mortgage loans.
4. Turn hobbies into revenue by finding ways to get paid for pet sitting, building things for people or selling photographs online to a platform to be used by thousands of users.
5. Share knowledge, expertise or passion in arenas that potentially produce income, such as starting a blog or podcast, teaching an online course or designing customized travel experiences for others.
6. Only use credit cards that convert spending into cash back, statement credits or rewards that save money on future purchases.
7. Invest a portion of retirement savings in vehicles that are designed to generate passive income on a predictable frequency – the most common examples are annuities and high-dividend stocks and bonds.
8. Allow companies to track online browsing and spending patterns in return for cash payments and rebates on buying items with certain retailers.

The above ideas will appeal differently to clients based on their needs and preferences, comfort levels and unique personality traits.

Is There a Hidden Asset?

Many retirees think of their personal assets in traditional terms – cash, houses, etc.  But it's important to remember that assets come in many forms, including those that may be less obvious initially.  One such asset, often out of sight and out of mind, is a life insurance policy. 

A Life Insurance Policy’s Potential

A life insurance policy is one of the most valuable assets many Americans will ever own. First, it can yield a significant tax-free death benefit payable to a client’s beneficiaries upon his passing.  Second, it can be an instrument for accumulating cash inside of the policy and be used to either help pay the premiums in later years or as a source of income through policy loans and withdrawals.  Additionally, there is a third way that a client’s policy can help produce cash flow during retirement.

Creating Passive Income with a Life Settlement

There is a healthy “secondary market” for selling life insurance policies that provides liquidity like the sale of other assets.  In fact, this market may ultimately uncover the most financially beneficial asset a client owns.

The sale of a life insurance policy is called a life settlement. A life settlement is defined as the sale of an existing life insurance policy to a third party for more than its cash surrender value but less than its net death benefit.

In a life settlement transaction, a senior sells his or her life insurance policy to a licensed third-party entity for a cash payment. The entity assumes payment of the policy’s and collects the death benefit when the insured passes away. These transactions are highly regulated, with laws governing life settlements in an overwhelming majority of states, covering approximately 90% of the U.S. population.

Contact Welcome Funds for Your Client’s Life Settlement Needs

Clients may not realize that their existing assets hold income-generating potential.  A thorough assessment could reveal unexpected opportunities, like a marketable life insurance policy.

If a client no longer wants, needs or can afford a life insurance policy, then contacting Welcome Funds to explore a life settlement transaction is an attractive option to explore.

Welcome Funds, an experienced life settlement broker, ensures that qualified seniors receive a fair market price for a life insurance policy.  And the firm is obligated per applicable law to act in the client’s best interests throughout the transactional process.

For more information or to receive a free, no-obligation life insurance policy appraisal, then please call 1-877-227-4484 or visit www.welcomefunds.com.