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How to Make Your Retirement Money Last


When surveyed about their retirement plans, many Americans express the fear that they'll run out of savings during their Golden Years. Yet that doesn't seem to have affected their investment choices.

Running out of money is the number one fear that people have about retirement — and that includes highly paid physicians. The sad truth is, most financial advisors will give you bad advice, because they are thinking about how much money they can make in fees. If you look closely at the advice they offer, you will always see convenient gaps in their plans. Then they legally protect themselves with disclaimers, because they always make assumptions that don’t reflect reality.

Typical advice from a financial advisor involves you putting money into the stock market, the market going up, and then you drawing 4% from that account in retirement.

There are two huge problems with that advice:

• Historically, the stock market has crashed about every four to six years and we can never tell when the next market crash will occur. We just know it will crash again.

• The money is fully taxed as ordinary income when you take the money out in retirement.

The typical financial advice that I’ve just described does not work. If it did, then 97% of Americans wouldn’t run out of money in retirement. If you’re like most people you don’t have nearly enough saved for retirement, and you’re on track to run out of money.

So what does work?

Create an income stream that will fully support your current lifestyle. You absolutely must consider inflation, so figure your current living expenses will double about every 20 years. To make your calculations, start with your age today, and double your living expenses every 20 years until you reach age 85.

Avoid mutual funds, stocks, investment real estate, and any other speculative investments. Your purpose here is to make money, and not lose money when the market turns against you.

Avoid taxable savings vehicles. Unfortunately, most savings vehicles and investment vehicles are taxable. This leaves us with one alternative… permanent cash value life insurance. If we use a life insurance policy as our savings vehicle we eliminate market losses, and we eliminate taxes.

Utilizing a permanent cash value life insurance policy, you can calculate with good accuracy how much money you will need to put into the policy. Your goal here is to create a lifetime income stream that meets your financial needs throughout retirement. If the policy is properly structured, you will never run out of money in retirement.

As you can see, permanent cash value life insurance is a powerful tool to make your money last throughout retirement.

If you’d like to learn more or if you have questions send me an email to Check out my website Follow me on Twitter, connect with me on LinkedIn, and absolutely make sure you come back here next week to Physicians Money Digest for another edition of The Alemian File.

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Victor J. Dzau, MD, gives expert advice
Victor J. Dzau, MD, gives expert advice