Skip to main content


Bring the Best of the 3 Financial Worlds into Your Retirement

10 Minute Read

If the past few years has taught us anything, it’s that the financial markets are like nothing we have ever experienced during our lifetime.  Of course, most investors realize the markets do have their ups and downs, good times and bad, and periods of volatility.  However, with uncertainly like we have never seen before, it’s more important than ever for those near or in retirement to strive for a plan that includes not only diversified investments, but more importantly, a mix of various types of financial tools, each with its own specific purpose. 

By working to strategically incorporate into your plan the worlds of Wall Street, insurance and banking, you may be setting yourself up for a retirement that is built to withstand the challenges the market presents today, AND in the years to come. 

The mistake that I find many people make when it comes managing their wealth at this stage of life is that they only view “diversification” through the lens of their investments, when in reality, they should be thinking about proper diversification in terms of their overall wealth and  all the financial tools available to them. 

Traditionally, the worlds of Wall Street, insurance and banking have competed against each other for your dollars by operating in silos and even emphasizing the drawbacks of using financial tools outside of the “their space.”  However, trying to find the best in all three of those worlds and using a variety of financial tools from each, may be the key to a financially successful retirement.

Let’s take a look at these three financial worlds and a few ways each could be incorporated when designing your financial plan:

1. Wall Street

Investments most likely will continue to be used for a large portion of your wealth throughout retirement even though the financial markets have experienced losses greater than 20% at times this year (according to Morningstar data, the S&P ended the second quarter down 20.6%).  Some primary purposes for continuing to be invested even moderately/conservatively in the markets would be to keep pace (or outpace) with inflation, protect against longevity and potentially grow additional wealth to leave as a legacy. 

Nobody wants to see the loss of purchasing power during their golden years, and over long periods of time and withstanding various periods of high volatility, investing in the market has served a purpose, even during retirement. 

2. Insurance and annuities

Both cash value life insurance and various types of annuities can play extremely important roles in a well-crafted plan.  The challenge for many people is truly understanding how to best use each of these tools, while navigating through the hundreds of options available in the marketplace. 

For example, many people would never guess that they could obtain life insurance after the age of 60, and thus dismiss using this tool.  However, cash value life insurance could be the “Swiss Army knife” of retirement because it can have multiple purposes. Beyond providing tax-free benefits to beneficiaries upon the insured’s death, other not-so-well-known features could include accelerating the death benefit to pay for long-term care and even using the accumulated cash value inside the policy for tax-free distributions if structured correctly. 

Annuities, which are also insurance products, can also play a very important role in retirement if used for the right reasons. The two primary purposes I suggest someone use an annuity for would be: 

  1. Preservation of principal … even in down markets many annuities will not see a loss in value.
  2. Lifetime income … they can fill the gap between what your monthly income needs are and what your Social Security and pensions provide.  This could help you avoid taking regular distributions from your investment accounts.  

When using any type of insurance product in your lineup I suggest consulting a fiduciary to review best options and explain both the pros and cons of these tools. 

3. Banking

Having cash at the ready for any number of purposes is more important now than ever.  This could include money for dozens of unexpected expenses, home repairs or even large purchases you anticipate making over the next 12 months.  How much cash someone needs to have on hand is specific to their upcoming needs.  However, having at least six to eight months to cover known fixed expenses is normally a minimum to feel comfortable.

The list for needing cash is endless, but it’s something that should not be overlooked.  Whether that’s simply setting aside money in a basic money market account or setting up a home equity line of credit for use if needed, make having cash on hand a significant part of your overall plan.

This may not be the “sexy” part of retirement planning but if done right, it could help you avoid the need to take distributions from your investment accounts in times of down markets. 

The worlds of Wall Street, insurance and banking may not always seem to “play nice” together given they are quite often competing for the same dollars.  However, crafting a retirement plan that includes the best from all three could provide a foundation built to make your golden years amazing.


This article was written by CFP® Nicholas J. Toman from Kiplinger and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to


Related Articles

High Earners: Don’t Overlook The Backdoor Roth IRA Strategy

6 Planning Tips To Help Ensure A Comfortable Retirement

Gen Z And Millennial Retirement Planning: How It's Changed

Stock Losses: 3 Tax-Saving Strategies In A Market Sell-Off

5 Questions To Ask Before Deciding To Retire Early

The CARES Act - 5 Ways Retirement Planning is Impacted

SECURE Act: Sweeping Changes Coming To Retirement Planning

Subscribe to Perspectives

Meet with a Financial Advisor

Ready to invest? We're ready too. Let us introduce you to your UnionBanc Investment Services Financial Advisor.

Connect with a Financial Advisor

UnionBanc Investment Services is making this article available for general informational purposes only and does not purport it to be a complete analysis of the subject discussed. Nothing contained in this material is intended to constitute legal, tax, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. The general information contained in this article should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.

Brokerage and investment advisory services are available through UnionBanc Investment Services LLC, an SEC-registered broker-dealer, investment adviser, member FINRA/SIPC, and subsidiary of MUFG Union Bank, N.A. Insurance services are available through UnionBanc Insurance Services, a division of MUFG Union Bank, N.A. with a California domicile and principal place of business at 1201 Camino Del Mar, Suite 208, Del Mar, CA 92014. California State Insurance License No. 0817733. Non-deposit investment and insurance products: • Are NOT deposits or other obligations of, or guaranteed by, the Bank or any Bank affiliate • Are NOT insured by the FDIC or by any other federal government agency • Are subject to investment risks, including possible loss of the principal amount invested • Insurance and annuities are products of the insurance carriers.