Is there a pension option that doesn't appear on your benefit-election forms? Many life-insurance agents will say that the answer is "YES!"
This so-called "hidden" pension option is often referred to as a "Pension-Maximization" strategy, or "Pension Max," for short.
The plan basically makes judicious use of life-insurance and annuity products to try to create a retirement possibility that is, in one way or other, more attractive than the canned options presented on boilerplate pension paperwork.
Is it a scam?
I don't think it's fair to call the strategy a "scam." There are a number of useful scenarios that can be envisioned.
However, some insurance agents and other industry salespeople may -- through being dishonest or just overzealous -- "push" the scenario onto people who really wouldn't be benefited from it (or who could even suffer loss by it).
The Pension Max can be devilishly tricky. And whether it is the "best" option in a given circumstance is going to be highly dependent upon the details of the situation.
Still, you won't get a second chance to elect the "right" option for your retirement. And your choice will affect you for the rest of your life -- and, possibly, for the rest of your spouse's life, too.
So... I think that these Pension Maximizations are worth examining -- and considering.
Therefore, in this video, I'll explain what pension maximization is and how it works -- in general -- using a basic example involving term insurance and a single-premium-immediate annuity.
Bear in mind that there are always variations on the theme! (Deeper into the video, I briefly sketch a "hybrid" maximization scheme, using both temporary AND permanent insurance.)
As the conversation progresses, I provide a short list of "pros," that is, considerations that may be advanced in favor of Pension-Max approaches.
But, I also give a critique, including an equal-and-opposite enumeration of "cons" and caveats that you should be mindful of.
I conclude with a few practical tips.
This is a continuation of a series of videos on pensions. For the other installments, see:
Pensions 101:
• Pensions: Where Did Th...
Should You Take a Lump Sum Or Installments?
• Pension Lump Sum Pros ...
What Are Your Pension-Election Options?
• Pension-Election Optio...
Are Pensions & Annuities the Same Thing?
• Annuities & Pensions: ...
What Are the Common Annuity-Settlement Options?
• Annuity Settlement Opt...
Disclaimer: This presentation is intended for general informational or entertainment purposes only. I am not a financial adviser or retirement planner. Nothing herein should be construed as providing financial, insurance, investment, legal, retirement, savings, tax, or any other sort of advice. If you require personalized evaluations or recommendations, consult licensed experts in your area.
For further reading, please visit:
www.insurancepr...
Music Credits: "Crypt," "Lantern," "Lighthouse," "Mega," "Pity," "Slick," and "Suede," all written by Amit Nagra; performed & produced by AlterEgo. "Sweet Memories," rritten by Dean William Palya, Jr.; performed & produced by Ghost Beatz. All songs licensed to Matthew Bell by Soundstripe.
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