Doug Andrew has been a financial strategist and retirement planning specialist for nearly five decades. The Founder and CEO of 3 Dimensional Wealth specializes in helping individuals and couples prepare for a comfortable retirement as well as assisting families in building long-term wealth.
Among the most requested advice he’s asked for is how people can protect their retirement nest egg from the negative impact of taxes, inflation, and market volatility.
“Those are the three big dangers that cause most people to outlive their retirement savings, and most of these dangers can be avoided,” said Andrew.
Andrew has written ten books ranked among Wall Street Journal and New York Times bestsellers. He produces videos for his YouTube channel and appears on radio programs focused on money matters, finance, and personal growth.
His advice has helped thousands of families save millions of dollars while experiencing financial abundance, primarily through strategies involving maximum-funded Indexed Universal Life (IUL) policies, which he calls “IUL LASER Funds.”
His latest title, The LASER Fund, explains these policies and how they can help investors better enjoy their retirement and have fewer financial worries.
Here are three key pieces of advice from Andrew to protect your retirement savings.
Riding Out Market Volatility
At retirement age, many people have their money in yet-to-be-taxed IRAs or 401(k)s invested in the market.
“They soon realize that Wall Street was never designed to create predictable income,” said Andrew. “It goes up and down and makes people nervous, especially retirees who depend fully on that income.”
He went on to advise that, by looking at the big picture and riding out the storms, most investors would average about nine percent returns. However, many retired people see the market dip by 20 percent or more and panic, pulling their money instead of waiting out the dip.
Then, when the market recovers, they buy again at high prices. This is how retirees end up costing themselves money and averaging only about 3.49% in returns.
Making 4% Work for You
The well-known four percent retirement rule says that retirees should be able to live off just four percent of their retirement nest egg in their first year after retirement. That number will be adjusted in subsequent years to allow for inflation.
It’s sensible thinking that will allow retirees to slowly deplete their savings and ensure their funds outlast their life expectancy.
Andrew takes this thinking and applies it to his own money philosophy, which primarily usesIndexed Universal Life Insurance Policies (IULs). These insurance company-led financial vehicles are risk averse and can eliminate or minimize market risk, so when the markets go down, you don’t lose.
“So, if you apply the four percent rule to a million dollar retirement account held in an IRA or 401(k), you should pull out 40k a year to live on — which is only 30k after taxes,” explained Andrew. “I’ve earned at least nine percent from my IUL for the last 42 years — that’s 300% more. I’d much rather get 90k tax-free dollars to live on for every year of my retirement than 40k pre-tax dollars.”
Go Bearish or Go Bullish
Another benefit of an IUL is that you can choose to relinquish your interest each year and use it to reinvest in upside options of your choosing. These include the S&P 500 and other possibilities that could earn 10-12% on your interest. However, if the market goes down, you could lose it all, but you never lose any part of your principal.
“Using this approach, you make money when the market goes up, but don’t lose when the market goes down,” he said. “This is called indexing, and indexing is a strategy — not to be confused with index mutual funds, where your money is at risk in the market.”
To learn more about Andrew’s financial strategies, you can get a complimentary copy of his latest book, The LASER Fund, by visiting his website.
About Doug Andrew
Doug Andrew, Founder & CEO of 3 Dimensional Wealth, provides a holistic program that helps individuals and families create financial, foundational, and intellectual abundance. He has more than five decades of experience in the financial sector and is a New York Times and Wall Street Journal bestselling author. The radio and television personality also has a high-performing YouTube channel. For more information please visit www.3dimensionalwealth.com.