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W H AT W O U L D Y O U d o i f y o u r retirement plan did not work as expected? Most Americans will spend 20 years or more in retire- ment. A concern of many pre-retirees is that they will not have enough income during retirement to enjoy their current lifestyle. The average couple retiring at age 65 can expect to pay $220,000 in out-of-pocket medical expenses during retire- ment. A chronic or severe illness may deplete retirement savings in a short period of time. Another concern is the impact of a significant market downturn during retirement. Taking distributions from your retirement or personal investments during a downturn may cause you to sell investments, locking in the market loss. Including cash value life insurance as a part of an overall retirement strategy may allow you to accumulate funds for use in retirement. First, the life insurance will provide a death benefit during your income-earning years. Most carriers now offer long-term or chronic-care health riders that allow the owner to withdraw a percentage of the policy's death benefit to cover medical care or even home care costs for chronic illness or age. Some carriers offer a rider allowing the policy owner to withdraw part of the death benefit at age 85 for any reason, providing a retirement safety net as one out of every four adults will live past the age of 90. Protecting assets from a market downturn, which could erode investments and negatively impact the ability to generate enough income, can be achieved by funding a high-cash-value life insurance policy as part of your overall retirement savings plan. In a market downturn, you can with- draw funds from your life insurance policy. This allows you to preserve your investment portfolio, provides time for the market to recover and avoids selling in a down market. Life insurance can be one part of your strategic plan for retirement savings. Your retirement stra- tegic plan should include savings in a tax-qualified retirement vehicle and personal savings as well. Diversification of your investments is another key to avoid having to liquidate investments in a market downturn. In some circumstances annuities may be used to provide a fixed amount of income over your life expectancy and/or the life expectancy of your spouse. As with all financial decisions, careful consid- eration should be given to balancing risk and rate of return along with the cost of the insurance/ investment. Martha Bethea is a CPA and the managing director in charge of the Medical Practice Management Group of CBIZ/MHM LLC in Akron, Ohio. Barbara Foster of CBIZ Life Insurance Solutions, Inc. San Diego, CA contributed to this article. ■ Life Insurance as Income Protection in Retirement By Martha S. Bethea, CPA ++++++++++++++++++++++++++ + +++ + +++ ++++++++++++++++++++++++++ BUSINESS SECTION 3 2 | Cleveland/Akron/Canton MD NEWS ■ M D N E W S . CO M ■ N OV E M B E R / D E C E M B E R 2 0 1 4