Common Sense Financial Planner

Imagine that you are a Financial Advisor and a retired couple comes into your office seeking advice on retirement planning. They reveal to you the following scenario.

 40% of their retirement assets are centered in one investment.

They continue to make monthly investments in that asset and for each $100.00 they invest less than $40.00 goes toward increasing the cash surrender value of the investment.

The annual ongoing administration cost of the investment varies; however, it continues to go up every year while their retirement income remains the same.

They also reveal to you that they do not wish to sell the investment because the cost of sale could be as much as 10% to 15% when all the direct and indirect fees are calculated.

However, they are very concerned and worried that the economy will continue to struggle from the Covid-19 virus . The current market price for the investment is very high and they are afraid that if they do not sell now they could lose more than the 10%-15% cost of sale when the market for the investment drops. Their main concern is if they do not sell now while the price is high, they don’t know if they can afford to wait another 7 to 10 years for the price to get back to its current value before they do sell.

 What is the investment and can you solve their dilemma ?

Please comment below.