The Issue on which Democrats and Republicans Agree in America

May 23, 2017 11:26:00 AM / by Darwin Bayston, CFA

By many measures, our country is sharply polarized when it comes to our politics, with registered Democrats and Republicans lining up on opposing sides more so than ever before. In fact, a Pew Research poll taken during the 2016 presidential campaign found that the average American’s views of the “opposing party” are now more negative than at any point in nearly a quarter of a century.

With this social backdrop, the findings of a recent report that found remarkable bipartisan agreement ought to make all of us sit up and take notice.

In their biennial study, “Retirement Security 2017: Americans’ Views of the Retirement Crisis,” the National Institute on Retirement (NIRS) reports that there is broad and shared concern over the ability to achieve a financially secure retirement. It would appear the one issue on which Democrats and Republicans agree these days is that we’re in the midst of a retirement savings crisis in America.

 The NIRS research found the following: 

  • 78 percent of Democrats and 76 percent of Republicans are concerned about their ability to achieve a secure retirement.
  • 83 percent of Democrats and 72 percent of Republicans support state efforts to help individuals prepare financially for retirement.
  • 92 percent of Democrats and 86 percent of Republicans say there is a retirement crisis in America.

“If we learned anything from the recent elections, it’s that Americans are beyond angry about their economic insecurity. So it shouldn’t be surprising that Americans – Democrats and Republicans alike – are highly anxious about economic security in retirement,” said Diane Oakley, NIRS executive director.

Retirement security is a very real problem for millions of American seniors who are struggling to bridge the gap between their available assets and their financial needs. Rising health care expenses often exacerbate this gap for seniors, who could be facing an average of $377,000 in out-of-pocket costs per couple for health care throughout retirement, according to The Motley Fool

This challenge makes it essential for seniors to maximize the value of all of their assets, including those they might be able to leverage in creative ways. For example, your home could be used to generate cash for you now without actually selling it by taking out a reverse mortgage. This is a loan available to homeowners that allows them to convert part of the equity in their homes into cash. The loan is called a reverse mortgage because instead of making monthly payments to a lender, as with a traditional mortgage, the lender makes payments to the borrower -- the borrower is not required to pay back the loan until the home is sold or otherwise vacated. 


Life Settlements


Another possible asset to be leveraged is a life insurance policy. Take a look at your policy and evaluate whether it’s still needed or affordable now that you’ve entered the retirement years. Some seniors have seen their premiums go up in recent years and now find the policy is too costly to maintain. Others decide the coverage just isn’t needed anymore because their kids are no longer dependent on them for money. If one of those scenarios sounds familiar, you may want to consider selling the policy to a third-party investor for immediate cash payment, known as a life settlement transaction. 

Life insurance is personal property, so you can sell it just like any other property you own. Each year, more than $100 billion worth of life insurance owned by Americans over the age of 65 is lapsed or surrendered back to the insurance companies that sold the policies – mostly from a lack of knowledge that an unneeded or unaffordable policy may be sold. Candidates for life settlements are typically aged 70 or older, with a life insurance policy that has a death benefit of more than $100,000, although policies of all sizes owned by seniors of all ages may be sold if there are health problems involved. The sale of a policy can bring you roughly seven times more money than the cash surrender value of your policy.  

America indeed faces a deep political divide today, but there is at least one fundamental issue on which it appears we have consensus agreement: retirement economic security. New research that finds retirement anxiety is high among both Democrats and Republicans should provide additional evidence that our seniors need to be aware of all possible strategies available to help fund their retirements.  

To learn more about life settlements, how they work and if you’re eligible, call the LISA office at (407) 894.3797 and we’ll be happy to answer your questions about options available to you.

Darwin Bayston, CFA

Written by Darwin Bayston, CFA

Darwin Bayston is President and CEO of the Life Insurance Settlement Association (LISA). His charge is to extend the outreach of the Association to all participants of the life settlement industry from consumers to capital providers, including producers, brokers, providers and service providers who are part of the life settlement market. He was previously Managing Director of Life Settlement Consulting & Management (LSCM), founded in 2004 and specialized in life settlement policy and portfolio valuations, and life expectancy analysis. He has published several articles and participated as speaker at a number of life settlement conferences. Previous to that he operated an investment advisory firm. From 1980 to 1993, he served in several capacities, including President and CEO the CFA Institute (and its predecessor organizations). While at CFA, he founded the continuing education program, was editor of the CFA Digest and supervised research projects funded by the Research Foundation of the ICFA. He began his career as an investment analyst with a Midwest life insurance company. Mr. Bayston has been Chairman of the Martha Jefferson Hospital Foundation ($100 million), a member of the Hospital’s Finance Committee and a past member of the Board of the Institute for Quantitative Research and Finance (Q Group).