Social Security Offset Plan
I am often asked, “what is a Social Security Offset Plan”?
I always answer this question the same way.
“You know how married couples lose Social Security Retirement Benefits when the 1st spouse passes away? Well, an offset plan is a specially designed retirement plan that has an additional 40% “bump” I call it when the contract owner passes away. That means that a $300,000 401-K plan redeposited into an offset plan provides $420,000 in death benefit the first year. But that’s not all.
All values increase based on an Index linked to the stock market. Your money is not invested in the market, but its gains are. That means that if the index goes up 10%, 10% is credited to your account, expressed in dollars and cents. And because it is dollars and cents, not share prices, the account is Locke and Protected from market declines. If the market drops and the index drops in any given crediting period, then the indexed account receives a “zero”. Not a minus 20% or so.
This protection is huge. During a period when the market rebounds, the indexed plan picks up where it left off. Those in the market are just getting back the money that they had lost.
You have to measure the “net”. And since the indexed plans will never lose money, any gains that are received from one crediting period to the next is added to your account along with your initial investment and is protected for the next crediting period.
And because these indexed plans never lose money due to market declines, the account values will increase and so does the death benefit.
How much you ask?
We made an online video of John and Mary who retired at age 66. In this illustration we assume that John dies 10 years into retirement at the age 76. During the 10 years that John was living, he withdrew $15,000 per year to supplement his and Mary’s Social Security retirement. At the end of 10-year, John would have withdrawn $176,000 and the death benefit to Mary was $677,000. All from a $300,000 rollover from a 401-k/IRA plan to a Social Security Offset Plan.
Want to watch a 7 minute presentation about John and Mary? Click here: https://gorillaretirement.com/ssoffset-2
