Addressing the Retirement Savings Gap for Affluent Professionals

High-income professionals earning more than $200,000 annually represent an attractive yet often underserved market. In the United States, there are approximately 12 million households in this income bracket, yet nearly 90% are under-saving for retirement despite their significant earning power.¹

The challenge is not a lack of income. To maintain their lifestyle in retirement, many of these clients need to save substantially more than the average American, often requiring a personal savings rate of 30% to 35% of income.²

Industry research shows that financial success is not driven primarily by returns, which account for only 26% of the outcome. Rather, 74% of long-term financial success is actually driven by the total amount of capital at work.³

The Affluent Planning Gap

Many high-income earners appear financially successful on the surface. They have strong incomes, established careers, and significant earning potential.

However, earning a high income and accumulating sufficient retirement assets are not always the same thing.

Many professionals find themselves balancing competing priorities. Graduate education debt, mortgage payments, college funding, business investments, taxes, and lifestyle expenses often consume a substantial portion of their income. As a result, even households earning well into six figures may struggle to save enough to support their desired retirement lifestyle.

This challenge becomes even more significant for clients who begin serious retirement planning later in their careers. They often have fewer years remaining to accumulate the assets necessary to meet their long-term goals.

For advisors, this creates an opportunity to introduce strategies specifically designed to increase the amount of capital working on behalf of the client.

This is where the Kai-Zen^® strategy can create a distinct advantage for you and your clients.

Kai-Zen is a premier, field-tested Life Insurance Retirement Plan strategy that uses leverage to address the shortage of capital at work for high-earning clients. By integrating a unique 3-to-1 bank financing, a lender matches your client’s contributions to significantly increase the capital at work. The client makes five annual payments, and the lender and the power of compounding interest take care of the rest. 

This strategy uses an Indexed Universal Life (IUL) policy that offers both upside growth potential and principal protection with a 0% floor, tracking to market indexes without the risk of market loss.

Identifying the Right Prospects

The ideal Kai-Zen prospect is often hiding in plain sight.

Business owners, physicians, attorneys, executives, and other highly compensated professionals frequently fit the profile. They have strong cash flow, recognize the importance of planning, and understand the
value of leverage in other areas of their financial lives. 

Many simply have not been introduced to a strategy designed to address the challenge of insufficient capital accumulation.

For advisors, these conversations can open the door to a market segment that is highly attractive and often underserved. Watch our quick “How it Works” video.

[1] United States Census Bureau, Smart Asset, and Financial Samurai.
[2] Bureau of Economic Analysis, U.S. Department of Commerce, and T. Rowe Price Insights.
[3] David Blanchett & Jason Grantz, Retirement Success: A surprising look into the factors that drive positive outcomes.