There are few things as comforting as having money in the bank. Unexpected costs can pop up at any time and that money that is held in reserve will, many times, meet that financial need without leaving the saver destitute. 3D Advisors has always been about helping individuals plan for a bright future with solutions like linked benefit. However, to have the money for the future, it will require people to start saving now. The following are saving money tips that can help you tuck money away for the future you want:

Cable has to go. We’re not saying that you can’t have any entertainment, we all need distractions and entertainment provides for that. Cable or satellite TV plans always start out affordable, but that affordability quickly disappears, and the costs keep adding up.

Try instead: streaming services are becoming a popular and less expensive alternative to cable.

Don’t buy new. From clothes to cars, buying new and trendy is a tax on the savings account. Cars lose their value the minute they leave the lot and fashion trends are constantly changing, so buying new isn’t always a great investment.

Try instead: consider buying used. Often, you can find what you are looking for without the extra cost of buying brand new.

Skip eating out. It’s nice to ditch cooking in favor for a great meal at a restaurant, but by the time you work in the cost of the meal, tip and the gas to travel there, you’ve spent way too much.

Try instead: Cook at home and save eating out for special occasions.  You can always find something to try via the internet’s large library of step-by-step how-to videos and recipes.

Be smart about your phone. No, you don’t need the newest smartphone, you don’t even need that pricey plan either. While new phones and tablets are always wanted, they aren’t worth the extra cost or data plan that comes with it.

Try instead: keep your smartphone and switch carriers or work with your carrier to get the best deals possible. It will save you money to be savvy about your plan and electronics.

It takes discipline and practice to save money. If you are new at saving, give yourself some small goals of how much you want to save per month and work up from there. As you put more money in the bank you’ll feel a sense of accomplishment that’s much better than anything you can buy yourself.

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1. You have a position of trust. No matter where you started out in life, being a financial advisor means you have a position of trust and authority. Clients want a knowledgeable financial advisor who will manage their money and help ensure their long-term monetary well-being. You will be their trusted guide.

2. Always room to learn. There seems to be a never-ending flood of financial products hitting the market every year. As a financial advisor you will have the opportunity to learn about the pros and cons of each product or company and teach your clients. Continued learning keeps advisors sharp and valuable.

3. Always improving. Unlike most other jobs, as a financial advisor there is always room to grow. While most employees must wait for job openings or for superiors to retire, as a financial advisor your growth potential is only limited by you. If you want to achieve more you can, no waiting.

4. Flexibility is built in. The nine to five grind is just that, a grind. Unpleasant, takes up the entire day and missing too many major events; the typical work environment is stifling. Advisors work when their clients have time which means an a-typical work schedule. While this can take some arranging, it also leads to increased schedule flexibility, leaving time for you to experience life and work.

5. The income. Finally, the income potential can’t be beat. No advanced degree and years slaving away are needed to earn a six-figure income. Bringing in clients, helping them plan for long-term financial security and becoming their guide isn’t just a job that makes you feel good, it pays well too.

In a world filled with the usual jobs and paychecks, it’s nice to have alternatives that bring job satisfaction and the income to match.

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• Increased contributions for retirement. What: if your client has a 401(k), 403(b) or a 457 (check which type) they can contribute $500 more money a year, raising the maximum from $18,000 to $18,500.

What this means: More money in a retirement plan means more money for the future, a definite win for you and your clients with this type of retirement. Use this information as you work with your clients to maximize their retirement contributions.

• Standard deduction changes. What: married couples filing jointly have an increased standard deduction of $24,000 (up from $13,000) while taxpayers filing separately have a $12,000 deduction and head of household filers have an $18,000 deduction.

What this means: The higher the deductions, the less money owed on taxes. This is a good thing for everyone. This could also mean more money for clients to invest in their retirement funds.

• New income tax rates. What: For those with incomes of $500,000 or more ($600,000 for married filing jointly) a new, 37% rate is in effect.

What this means: For those clients in the top earning bracket, this slight decrease in taxes will allow for more take home income. This is an appropriate time to contact high earning clients to make changes to their retirement plans and add maximize their contributions.

• Roth IRA contributions. What: Income limits for contributing to a Roth IRA have been raised to $135,000 for single filers and $199,000 for married, filing jointly.

What this means: Expanded income brackets will allow more people and couples to start and contribute more to Roth IRA’s which are a great starter product for retirement savings.

With all the new tax law changes, whether they apply to your clients or not, it’s good to get in touch and go over their retirement plans to make sure they are getting the most out of their portfolio.  

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Re-thinking the 9 to 5 Let’s You be the Boss

Financial advisors need to be available when their clients are available. For most, this means an unconventional schedule that you as the financial advisor control. Setting up multiple appointments on several days a week means that the other days are left free to find more clients or focus on other life pursuits. In the end the freedom of schedule leaves time on your side.

You are the Educator and the Salesperson

While the modern client is more educated about retirement issues and insurance needs than a generation ago, they will still need to learn from you. This sets up an opportunity for you as their financial advisor to continue in learning and education to make yourself a valuable financial asset to your clients. While many fields have workers who stop progressing, in order to make the sale and provide the best product for your clients you will have to keep learning. This constant education will aid you as you work with clients.

You Earn While You Help

You are helping your clients plan for their future, whether through a linked benefits policy or an annuity, you are guiding people toward financial security. The best part? You’re getting paid for this as well. The nice perk about becoming a financial advisor is you have the opportunity to provide a valuable service while earning an income that really has no limit. Providing superior service and earning money for it is a wonderful way to spend your career.
Bottom Line: Despite the uncertainties, becoming an insurance and investment advisor presents the unique combination of pay, continuing learning and the ability to help people plan for their future.

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• Being Honest and Up-front Will Always Do More Good than Harm

Transparency has always been a problem when it comes to selling intangible products. Policies can be complicated and tied up in fine print, so your best bet is to know all of that fine print and know when it’s not the right product for your client. Protect your reputation by being candid and upfront if you think it won’t work for them. You might not get the commission you were hoping for, but you will gain the trust of you client and many times create a future customer.

• Commission Driven Sales Can Blind a Good Agent

We need money to live and pay our own bills and when you make commission you are motivated to sell as much as you can as fast as you can. This may harm your reputation among your potential clients who know you need them to make money. The best way to gain trust is to be upfront about the products and be prepared for the no-sale. It might be frustrating, you might have to work harder to make enough to live on but being honest makes you an asset and clients will come back to you if they trust you.

• Keep the Communication Open

Investment products like annuities are subject to ebbs and flows in earning potential. If the economy is struggling, clients won’t be earning as much money and might even lose some of their investment. The best course of action is to thoroughly explain the product to your client and be open to questions. Be available for future questions and be honest with your answers. Communication will go a long way in helping your customers feel secure that their money is in good hands and maintaining an excellent reputation.

The insurance and investment industry has had its ups and downs but if positive progress is going to be made it will have to start with the agents.

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While many disparaging things have been said about Millennials, they are also the generation most likely to have a written financial plan unlike earlier Generation X or Baby Boomers. However, this form of financial planning doesn’t always translate into long-term money saving or management. Millennials, as a whole, are more likely to buy on impulse and use their money for the latest fad, fancy drink or trendy eatery. The best approach when working with millennials is to work with older millennials who have settled down and transformed their spending habits to reflect a more stable model of long-term success (i.e., home ownership, marriage, etc.). These are signs that this generation has something to save for and will be more willing to consider their future. Presenting with high quality products and ensuring that their money isn’t being wasted is the best approach.

Generation X spending habits are characterized by being inclined to spend on great customer service combined with a great deal as opposed to dropping money on high-priced, fancy items. Gen X is looking for a value priced experience with 5-star service, so the most expensive products won’t naturally appeal to these savvy shoppers. An advisor who takes the time to listen to these individuals, give superior service and the right priced products will make a better impression and gain more clients.

The important thing to remember is that no matter the generation, the best thing you as an advisor can do, is present the best products for your clients and be available for any questions or concerns. Be there and be ready to communicate.

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• Do not, under any circumstances, simply brush off your client’s complaints. You are their advisor and as such you have a responsibility to listen closely to their concerns.
• Ask Questions. The nest step after listening is to ask questions, not just any questions, specific questions that will help you fully understand the complaint. Asking questions shows that you are listening and that you want to help your clients clear up any issues.
• Keep your emotions in check. This is not the time to get defensive. Yes, you might be completely in the right and know more than the customer, but a defensive attitude won’t help you solve the problem. Keep your cool and work on a solution.
• Empathize with your customer. Mentally switching roles with your client might help you see their complaint a little better and understand their point of view. Trying to understand your customers will diffuse tense situations and aid in finding a solution.
• Take a little time. Solutions don’t come immediately and in many cases, will take some time to figure out. Let your clients know you are going to get to the bottom of their concern but that you will need some time to really dig into the issues at hand. Giving yourself some time will help you find an adequate solution.

There will always be customers who are less than satisfied, even after doing your best to rectify their problems. If  you’ve given your best and they are still unhappy the last step is to let it go and focus on doing better for the next client.

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• Keep in contact. Constant calls will scare clients away but no contact will also leave a client out of mind and free to explore other insurance options on their own. Make contact throughout the year through mediums like newsletters, emails and phone calls. A little contact lets your client know that you value them and are looking out for them.
• Review coverage. Along with regular contact, it’s important to make a yearly in-person visit to review policy coverage. This gives you as their broker a chance to show the strengths and weaknesses of their policies and introduce new or additional products that will help strengthen their coverage. In person coverage review will let your client keep their policy up to date and possibly create a repeat customer.
• Let them know when they will be saving and spending. Insurance premiums can rise and fall for many reasons. Take time to contact your clients and let them know of any discounts they might qualify for. Also, contact your client before any rate hikes so that you can work on ways to cut their premium to hopefully avoid the hike. Clients will trust and appreciate the broker who is looking out for them financially.

In the end, keeping a client is one less client you will have to find. Clients will always be free to choose where to buy their insurance, but with some effort and care on your part, they will stay with you as their trusted broker.

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IUL’s also have other perks that, when paired with an IRA, create the greatest retirement benefit. For starters, many IUL’s offer flexible premiums and protect against economic uncertainty, all with the opportunity to earn better interest than comparable products. Making annual contributions to an IUL builds up cash value. When you combine this with better interest rates, the policy becomes cash rich by the time of retirement.

Investing in an IUL means investing money into a stable, long-term retirement program. First, when a premium is paid, it goes into a basic interest strategy which holds on to the premium to fund policy charges and insurance costs for a year. Next, the excess or remaining premium is put into segments that were previously selected for a specific amount of time, lasting from one to six years. These funds are locked into place for the duration of the segment terms. As the segment term ends, the money is placed back into the basic interest category and new premium money is moved into specific segments with terms attached. The money is moved around over fixed periods of time to create the maximum amount of interest. Interest generated is determined by the S&P 500, NASDAQ 100, Dow Jones Industrial Average and the Hang Seng.

While the above explanation is only a brief explanation of the process, the fact remains that pairing an IUL with an IRA provides the best return on investment when it comes to retirement. With both products cash flow is created without having to sacrifice lifestyle when retirement comes around. And honestly, we can all use a little more money come retirement time.

The post When Life Insurance Pays Off (Part 2 of 2) appeared first on 3D Advisors.

For financial advisors, especially, making sure clients know the importance of setting up a successful IUL is the first step in creating a strong portfolio that can withstand stock market fluctuations and taxes. For example:

If Mark is a 30-year-old professional looking to save toward retirement, starting up an IRA would be a great first step. An annual IRA contribution of $5,500 is completely tax deductible, with the amount rising to $6,500 at 50 years and older. At age 70, taxable money must be taken out of the IRA. In all actuality, after age 59 ½ money can be taken out of the IRA but waiting until 70 years brings the biggest benefit. By 70 years old, with the average yearly contribution, Mark’s usable yearly withdrawal is roughly $45,000 in spendable cash. This seems like a great amount until Mark realizes that this money is taxable meaning a good portion will go to the government.

Now, If Mark starts a IUL life insurance policy alongside his IRA he would have comparable if not more spendable cash without the taxes. IUL premiums are set to the after-tax cost of IRA contributions, meaning that the cost is the same for an IRA and a IUL. Once an IUL is set up, it collects cash value, while also preserving death benefits. As an IRA grows, so too does the IUL. Once retirement age is reached, cashflow from an IUL is distributed without the required taxes. Investing in both an IRA and an IUL would be a wise move for Mark.

The perks and caveats of having an IUL are only mentioned above. In part two, we will go into more of how an IUL can really help toward retirement.

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