Life After the Empty Nest

Baby boomers are experiencing an exciting season of life, but it can also be riddled with confusion and mixed emotions. They are trying to navigate their golden years without children living at home while often building relationships with grandchildren. And a surprising number of them are struggling with finding fulfillment in their last quarter of life.

Achieving a sense of purpose and meaning is not just important for emotional reasons; there is also a direct physical connection to a retiree’s health condition. A 2021 report by financial services firm Edward Jones notes that “having a sense of purpose can reduce the risks of depression, cognitive decline, and cardiovascular disease,” according to Money Talks News.

The conclusions were based on a survey of more than 2,000 seniors, who cited the following keys to fulfillment: spending time with loved ones; being generous or giving back to others; personal faith and values; living a fun-filled life; and having sufficient financial resources.

An “Unnerving” Transition

It is interesting to note that, while having great wealth is typically not highly correlated with personal satisfaction in retirement, surveys consistently indicate that having enough money to fund a retiree’s desired lifestyle appears near the top of his or her concerns.

Most baby boomers were raised with an ethic of working hard for their whole lives, saving a little money along the way and hoping they would accumulate enough savings to enjoy their retirement years. But once the golden years actually arrive, it is unsettling to not know if the nest egg is enough to fund the lifestyle they dreamed about.

One study by Age Wave shows that initial discomfort about retirement lasts about 18 months before the level of happiness begins to rise.

“There is a life beyond work, but it can be very unnerving for people making the transition,” said Ken Dychtwald, a gerontologist and the founding CEO of Age Wave, in an article published by AARP Bulletin.

How Trusted Financial Advisors Can Help

Financial advisors are in a unique position to help their clients manage the emotional and practical implications of spending down their retirement savings. Based on our conversations with such advisors — from life insurance agents and financial planners to wealth managers and estate planning attorneys — there are three tips for helping clients cope with the challenging transition to experience fulfillment in the fourth quarter of their lives:

Change the mindset

The mental shift of moving from accumulation to decumulation may be the most difficult to accomplish. It is important for seniors to learn to enjoy the fruits of their labor.

Review withdrawal rates

Many retirees need to be reassured that their plans are still sound and sustainable. Maintaining a portfolio withdrawal rate that is prudent given their age, inflation assumptions and a conservative return projection is critical.

Assess inventory of assets

It is essential to review everything seniors own — both liquid and illiquid assets — and evaluate whether each item is still serving its intended purpose. For example, most clients purchased a life insurance policy to provide financial relief for loved ones in the event of their premature death. But today, most retirees are in a different place in their life journeys.

Please find below three questions to help evaluate whether a life insurance policy is still serving its original purpose:

• Is the coverage still necessary?
• If so, what is the right amount to maintain?
• Are the current premiums still affordable?

How Welcome Funds Can Help

Welcome Funds employs a team of experienced life insurance professionals who analyze all types of policies.  We conduct no-risk, no-obligation reviews of life insurance policies to determine if they can potentially be sold as a life settlement to a licensed third-party investor.  A life settlement is a transaction where a policy owner sells his or her unwanted, unneeded, or unaffordable life insurance policy for a cash payout that is less than the death benefit but more than the cash surrender value.  After receiving some general information, Welcome Funds uses sophisticated mathematical analysis and a proprietary algorithm to provide seniors and their advisors with a confidential policy valuation that helps them decide to sell or keep a life insurance policy.  

Conclusion

A powerful way to raise a retiree’s comfort level and confidence with his or her personal finances is to access liquidity from an asset he or she no longer needs or can afford. A life insurance policy can be sold like a car or home and the cash infusion can maximize seniors’ most precious resource in retirement — their time. This is the key to achieving greater fulfillment in the fourth quarter of life.

For a no-cost and no-obligation valuation of a life insurance policy or to learn more about life settlements, please call 877.227.4484 or go to www.welcomefunds.com.