Rethinking the 60/40 Portfolio

For decades, the classic balanced portfolio—60% equities, 40% fixed income—served as the default roadmap for retirement planning. The thesis was straightforward: when stocks fell, bonds would rise, buffering the drawdown and providing dependable income.

In recent market cycles, that correlation has repeatedly broken down, leaving savers exposed to simultaneous drops in both asset classes.

The Role of Fixed Index Annuities (FIAs)

Fixed Index Annuities offer an alternative asset allocation tool:

• Principal Protection: Your principal is contractually shielded from stock market downturns.
• Index-Linked Upside: Returns track market indices (like the S&P 500) up to an annual cap or participation rate.
• Tax-Deferred Growth: Gains compound without annual tax drag until distributions commence.

Cash-Value Life Insurance as an Uncorrelated Asset

Permanent life insurance policies (such as Whole Life or Indexed Universal Life) build cash value on a guaranteed or index-linked basis:

• Liquid access via tax-free policy loans
• Immunity to equity sequence-of-returns risk during retirement
• An income tax-free death benefit for heirs and business succession

To evaluate how annuities and life coverage fit alongside your 401(k) or business exit plan, talk with Tab Cohen directly at (636) 536-0386.