Two weeks ago, Nina wrote an article titled: HIV and Surviving Retirement. I was especially intrigued by this one as it touched upon two extreme epidemics nobody likes to talk about these days (retirement and HIV). I remember seeing Madonna on MTV along with several other stars of the eighties warning us about the risks of HIV when it was known to affect and infect all sexualities. Nowadays, we hardly see even a push for more education on HIV, the virus that causes AIDS. Furthermore, most of us don’t want to touch the topic of retirement for fear that we might actually come to grips that Uncle Sam probably won’t give us what he promised and we’ll have to fend for ourselves.

Outta Sight, Outta Mind

It’s like we Americans are living in a dream world when it comes to the long-term. Could it be due to the fact that we provide ourselves with too much of a safety net? Do we live under a blanket of ignorance so thick that sooner or later it suffocates our every free breath? Do we feel there is a parachute available to pad our landing as we break our legs on reality?

I am unclear as to the answers, but the questions could be asked of both epidemics. I refer to both retirement and HIV as epidemics because both are slowly eroding at the freedoms of all Americans. Without an adequate retirement plan ‘“ one that is carried out ‘“ there is no freedom to enjoy life unless it is at the expense of something or someone. With HIV, there is no freedom to obtain the proper life or health insurance. In fact, HIV carries the same uncertainties as an inadequate retirement plan because with neither can one tell how long the situation will continue.

Both epidemics affect my career. I have several clients who have HIV and others who have not saved for retirement. I would like to say my clientele is representative of America as I have a multi-racial, multi-cultural clientele base of men, women and transgender alike, and of course, all sexualities. I also fear to say that I may not be able to help many of them with the bulk of their issues. But I have been able to provide help to some that in a way that, if applied properly, could alleviate some discomfort. If you and/or someone you know are in the boat of having no retirement and/or affected by HIV, I have just a few suggestions that could lessen the burden of said epidemics.

(Disclaimer ‘“ the options I propose are just that, options. I cannot recommend any financial product or company in particular without first understanding the financial situation of a client as well as his or her goals.)

Variable Annuity with a GMIB Rider

A variable annuity (VA) is simply a jumbo tax shelter with some insurance benefits that are guaranteed by a company. Often, many of these companies are really big (I mean, REALLY BIG) and they often charge a lot of fees for their Variable Annuities. But I have found a Variable Annuity with a rider (a special buzzer or whistle that is purchased at the time of the contract signing that offers additional benefits) that provides a guaranteed death benefit for the greater of either:

  • The amount of money you originally placed in the account or’¦
  • The highest dollar amount at year’s end (and this can be locked in, but again, the company charges fees for the benefit)

Furthermore, take MetLife (probably the largest of these really big companies) which offers another rider called the Guaranteed Minimum Income Benefit rider. This, in a nutshell, offers a minimum interest rate, i.e. a ‘œfloor’ (not available in all states, check with a financial advisor for more details) that is guaranteed to pay out so long as you follow the details of the contract. This also allows for market exposure. Depending on the type of investor you are and how the market performs, there could be no limit to the amount of increase in the Variable Annuity.

Again, you must check the contract’s details carefully and you should not simply follow the words of this article, but I believe this may be a fantastic product for some clients who are struggling with HIV and who want a ‘œceiling’ with no ‘œfloor.’ And, I would highly suggest you consult with a licensed financial advisor who is familiar with Variable Annuities so as to maximize your market exposure and minimize your risk, in accordance with your investor profile.

Bank Insurance

Although I have only received life insurance from one bank, it was when I opened a checking account. This was a while ago and I know not all banks offer this, but I was given a guaranteed life insurance amount of $1,000. There was no medical, no questions about health and I don’t remember even signing for it. It simply came as an added benefit to opening the account (something like getting a free toaster for opening an account). If this is available at one bank, how many others offer the same benefit? If you find this benefit at one and there are no ethics or legal violations to receiving the death benefit should you have HIV, what’s stopping you from opening numerous accounts at numerous banks to receive numerous death benefits? (Note, I am not necessarily recommending this; I am simply asking questions to which you may find the answers).

CPA to the Rescue!

If you are struggling with the dilemma of retirement and health care costs are out of hand (even if you receive insurance through your work which offers guaranteed coverage) and the company for which you work offers a 401(k) with a matching program, TAKE ADVANTAGE!!! This is not really a request, but a mini-demand. You owe it to yourself and your partner/family to get some retirement and with the help of a licensed tax preparer, consultant or, even better (sometimes) a CPA, you may be able to find a way to keep your same paycheck while contributing heavily to your deductible retirement plan.

You see, the IRS allows you to increase the amount of claims you make provided you have a deductible reason to do so. By claiming more ‘œdependents,’ one who qualifies (again, talk with one of the aforementioned tax folk) could contribute to their deductible retirement plan and keep a fairly equal dollar figure on their paycheck. This provides a way to increase your retirement contributions without missing money. You could pay the IRS or your 401(k); which would you prefer?