Many high earners believe their most valuable assets are their savings and investments. And at this stage in life, if you are a high earner, you probably have substantial savings in your home, savings, and investment accounts – all significant parts of your tangible asset portfolio.
It underpins everything; your lifestyle, your home, your future. Unlike your tangible assets, your ability to earn a living doesn’t lose value to hurricanes or earthquakes, stock market drops, or recessions. In fact, it typically grows over time as you master your field.
But that doesn’t mean you don’t need to protect it. Accidents and illness don’t just happen to older people (or other people). Life-changing events happen every day. As a high earner, you may have enough money set aside to take care of a month of expenses, or three, or even six months. But what happens if you’re out of work for a year or two? Or you’re permanently unable to return to your job? Who pays the mortgage? Can your spouse pick up the slack in income and take care of you as well?
What would the impact be if you lost your ability to earn income for six months or less?
Most of us don’t worry about short-term loss of income. We might think of short-term protection as something that factory workers or lumberjacks require due to their dangerous work. However, knowledge workers get injured more often than you might think; in fact, they’re twice as likely to be hurt in a fall.
It can easily happen off the job, too. Suppose you’re an avid horse rider in your fee time, and one weekend during a ride, you’re thrown and injure your back or arms? There’s no way to maintain your usual pace at the computer for two or three months (or longer), and your income is affected? Anyone can become injured and unable to handle their usual 4-hour (or more) workweek.
Crucial questions to ask:
At your level, most people plan to work well into their 60s and 70s, and the loss of even a few years of peak income can be devastating. If you’re relatively young when you’re permanently disabled, two or three decades of income might disappear. Your financial plan potentially needs radical adjustment either way. Being forced into retirement because you no longer have the mental or physical capacity to do your job can – and does – happen.
Crucial questions to ask:
No one expects to die before they are ready. Dying years before you time is already tragic and deeply painful to those you leave behind. And when there are others counting on your earnings to pay the bills, it can be financially devastating.
Your employer might offer a life insurance policy, but the death benefit usually isn’t enough to sustain the family or even pay off debts.
Crucial questions to ask:
If you’re an entrepreneur or business owner, it’s critical to think about what happens to your company if something happens to you. Who takes over the work, if necessary? How do you get paid?
Or maybe you’re a high earner with a significant investment portfolio that’s mostly liquid. The assets won’t provide you an income in the near term, or cover your debts and expenses in the event of your death. How do you generate a reliable monthly income stream or set aside cash in a tax-efficient way from assets you can’t easily sell?
Crucial questions to ask:
The proper time to fasten your seatbelt is always before an accident happens. To that point, any defenses against loss of income must be in place before the worst happens.
It’s important to take action now to protect your most valuable asset. And your defenses are potentially time-sensitive. Age, health, and potential changes in employment or income may impact your risk mitigation strategy.
The sooner you understand your options, the quicker you’ll be able to find the solution that is right for you.
The good news is that there are a number of ways to safeguard your plan against unexpected income loss. The bad news is that having so many choices can seem overwhelming. Fortunately, our advisors can help you determine which option is right for you.
Search for an Advisor, to schedule an Earnings Protection Review. This review will help you figure out if you have any gaps in your earnings coverage, and if you have too much in one area. We’re experienced in helping professionals like you get the right amount of protection for the right cost.
Find the right strategy to shield your lifestyle and future begins here. You can search for an independent advisor and research them through their own websites, or we can help you by passing your information along to one of the many qualified professionals through Trek.
Service Office:
8355 E. Hartford Drive, Suite 105
Scottsdale, AZ 85255
(480) 483-1510
Email: info@trekfinancial.com
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