NQnext – Designed to Work with Plan Participant’s Current Financial Advisors

What makes NQnext unique is the commitment to work with a Non-Qualified Plan Participant’s Current Financial Advisors. This immediately puts the plan sponsor at ease and makes it easier to introduce the NQnext platform.

Here is how it works – 12 Months before the Executive is to receive the first Non-Qualified Plan Distribution a NQnext package is delivered. The package is best communicated online and preferably in a tablet format. Their benefit payments will be explained along with the expected taxation. NQnext describes the Long Term Care and Life Insurance options available to the executive in an interactive format.

In about fifteen minutes the executive will have a greater understanding of the benefits of NQnext for their family. Keep in mind the age of executives will typically range from 55 to 70, an excellent time to put the coverage in place and they have a source of funds from the Non-Qualified Plan.

At the end of the program if the executive decides to pursue additional NQnext coverage they will be given the choice to work directly with NQnext or their Current Financial Advisor. If they choose their own advisor, NQnext will send directly to the Personal Advisor all of the information in the NQnext package. If the advisor agrees with the recommendations then if desired NQnext can facilitate the implementation of the plan including applications, underwriting and delivery.

We think this approach makes the most sense. What do you think?

Thank you for reading!

Doug Marshall

10,000 A DAY FOR THE NEXT 15 YEARS

Every day 10,000 baby boomers will turn 65 in the United States. NQnext recognizes the uncertainty of aging in America. The CORE objective of NQnext is to reduce the emotional and economic uncertainty for families as parents and friends become more dependent on others for day to day living.

SIMPLE and ADAPTABLE

When I recently polled some of my peers about their parents the answers were all over the map. Some were living, some passed away years ago, some were healthy and some were ill. NQnext believes that old age planning is important and can be more successful if kept simple enough to adapt.

THE IMPACT of ONE LIFE

At the end of my Father’s life there were over a dozen family members impacted in those final days. Illness and death are traumatic events. Dad’s illness changed travel plans, vacations, work schedules, sleep patterns….. It changed everyone’s life in my family but we were able to focus on making Dad comfortable and caring for our Mom.

NON-QUALIFIED PLAN DISTRIBUTIONS

Some planning tools will cost money. Non-Qualified Plan Benefit Payments can be a source of funds to pay for products that will create greater financial security. But the focus of NQnext is not product specific. It will always be driven by our CORE objective to reduce emotional and economic stress.

Thank you for reading

Doug Marshall

Open Source – NQnext

This idea is still developing in my head, the idea of modeling NQnext after the Open Source Business model. Open Source is typically associated with software. WordPress, the blogging software I use here is built on an Open Source framework. It is a great business story. I suppose it would be difficult to “Open Source” the car making business but I suspect there may be parts of the automobile industry that could benefit from some form of Open Source development when it comes to public safety perhaps. But this is getting away from the point here.

In my Amazon wish list is a book – “Flash Foresight – See the Invisible to Do the Impossible” – Authored by Daniel Burrus. I have not purchased yet only to avoid diluting my current reading list of over half a dozen books. What got the book into my wish list was an excerpt from the books summary identifying seven triggers to Flash Foresight…. The first three are:

1 – Start with certainty (use hard trends to see what’s coming.)
2 – Anticipate (base your strategies on what you know about the future).
3 – Transform (use technology-driven change to your advantage).

Here is what I know…. The population is getting older and people are living longer. Elderly care will be taking a greater toll on families than ever before, financially, emotionally and physically. Technology can create access to products and resources and it can transform the delivery of solutions for the elderly.

So why is an Open Source concept the model I want to use for NQnext? Because the emerging need for better solutions for the aging population impacts everyone. Open Source will allow NQnext to be nimble and adapt more quickly.

Simon Sinek wrote a book – “Start With Why” – He points out that all companies know WHAT they do but the ones that make the most impact understand the WHY of their business.

The WHY of NQnext – We are building NQnext to change the lives of people and their families as they face the prospect of living longer. NQnext is giving them a story to tell to their families. How and What NQnext does will be driven by the stories people want to tell about themselves.

I do not have enough imagination to consider all the possibilities thus the need for an Open Source approach. This will give me a chance to work with some very creative people. This is going to be an awesome adventure.

Thank you for reading!

Doug Marshall

Awareness Part 2

Almost twenty years ago in the mid 1990’s I started to think about what happens to Non-Qualified Plan Benefit Payments when they are distributed to Executives. Back then I was a Northwestern Mutual Special Agent and an Associate with The Todd Organization. It seemed to me it would be a good thing to have an advisor relationship with these executives, a great customer base. But I never did come up with a workable idea and a story compelling enough to get a project going. I am not the only person to be asking this question and some have tried however there is not much evidence of great success.

What has changed for me that I now believe in the potential success for NQnext?

– AWARENESS –

Our perspectives are changed by real life experiences. Last week I sent out an E Mail to ten of my peers in the insurance industry. Some were under 55 (my age), some over. I asked them about their parents, if they were still living, if deceased how old they were at the time they died and then if they had experienced a long term illness. Many of them had stories to tell about the lessons learned from watching their parents in the later and final years.

I personally became aware of what families go through when an elderly parent becomes ill. My Father died in April and in the uncertainty of his last two weeks my perspective changed and NQnext was launched not long after.

NQnext simply presents the idea that it is a good time to execute a Life Insurance and Long Term Care Plan when Non-Qualified Benefit Payments commence. Since individuals receiving these payments are typically ages 55 to 70 there is a good chance they are AWARE of the costs associated with old age because of their experiences with their parents or parents of friends.

Over coffee earlier this week I sat down with a new friend Matt Hamann who has spent more than 20 years in the Long Term Care (LTC) Industry. Matt told me that when he started in the LTC business there was a lot of focus on statistics and the chances that someone will have a LTC event. But now he sees a change in the message that really boils down to a simple question – “What if the same thing happened to you?” – NQnext recognizes the need to ask this question and those of us associated with NQnext will be working toward getting permission to pose that question to individuals receiving Non-Qualified Plan Distributions. This one question opens the door. I expect you will hear more from Matt on this subject.

Today I read a tweet with a Chinese Proverb – “The best time to plant a tree is 20 years ago, the second best time is now.”

Let’s do this now!

Thank you for reading!

Doug Marshall

You should follow me on twitter herewww.twitter.com/jdougmar
From there you can link to @NQnext and @sPlan5

A Year to Plan

Once an executive is less than 12 months away from a non-qualified plan benefit distribution there is nothing they can do to change the payment event. This is a part of the provisions of IRC 409A. Rather than viewing this as a restriction of inconvenience the executive could use this year long period as a time for financial planning. They will know about how much they will receive and when it will be received.

We have seen a shift in the 401(k) industry after years of focus on asset accumulation. Now the focus has shifted to how individuals can make those accumulated dollars last for a long time into retirement. This created new products and financial strategies.

Perhaps it is time to start looking at the options for executives receiving non-qualified plan distributions. There are many tax advantaged products and strategies readily available today. They include 529 College Savings Plans for Grandchildren, Annuities, Life Insurance and Long Term Care. There is nothing we can do to avoid taxation on current distributions but it may make sense to look at ways to minimize tax going forward. All of these products offer some form of tax advantage.

NQnext will focus on Long Term Care and Life Insurance because it is important to get these in place while still healthy. 529 Plans and Annuities are not health sensitive therefore the urgency is not as great. With a year to plan I hope people will make the most of it.

Something to think about.

Doug Marshall

Please follow and engage on twitter – http://www.twitter.com/NQnext

Awareness Part 1

My best friend Chuck is a few days my junior but his family is much older than mine. His Mother and Father passed away over ten years ago. Chuck had barely hit his 40’s when he was confronted with the long term care needs of his parents. He and his older siblings struggled together with varying degrees of success and involvement to put together a plan of care. I was not around much at the time and I had no appreciation what a monumental task it was for Chuck. It was tough on him physically, tough on his relations with his siblings and emotionally draining.

Part of the ideal of NQnext is to create a community, a place for discussion and interaction about the challenges facing our generation, a place to discuss how we will provide for ourselves in those later years. I am sure Chuck could have used a community at the time for support but few of his peers were faced with parents as old as Chuck’s.

There is a whole new community growing and it is a large one. Americans between the ages of 55 and 70 will live longer than any other generation and those last few years could be very tough for the entire family. Just because this group will live longer does not mean it will end better. There will still need to be adequate care, adequate money and adequate emotional support.

In Awareness Part 2 we will look at several other examples given to me from colleagues about their parents. What we will see is how unpredictable our later years can be and maybe look into some possible ways to soften the blow.

The Fall season is in full swing. Seattle has a good storm going on right now. The fans are watching a lot of football and baseball playoffs. There will be many commercials from insurance companies. Will the message from those companies really speak to those in need of the financial security hit their mark? I don’t think so. What will hit the mark is a sharing between members of a community. NQnext exists to be that community so we can learn from each other through our stories about our parents, ourselves and our children.

You can also engage on twitter – www.twitter.com/NQnext

Doug Marshall

NQnext – Initial Case Study

$1,666,666.67 Lump Sum Distribution – Case Study

Let’s start the week by looking at an example of how NQnext might work. A 60 year old executive is receiving a Non-Qualified Plan lump sum distribution due to a change in employers. The executive is in a 2013 40% marginal tax bracket resulting in income tax of $666,666 leaving a net lump sum of $1,000,000. Up to now most NQ Plan TPA’s and Plan Sponsors provide no suggestions about the best way to leverage the receipt of this money. Take the time to consider the case example. Perhaps we should try to provide more guidance.

I believe people want to tell a story about themselves and they do so when they make financial decisions. One of the greatest challenges facing American society today is longevity. My Father who recently passed away at 82 may not have lived beyond 75 if it were not for medical science. We are enabling people to live longer however we have not come up with many brilliant ideas about how to afford it. I also believe people do not want to become a burden to their children yet fear the unknown of their last few years.

NQnext is a way to help people tell a story of care and love to their family. Go back to the executive who receives $1,000,000 after-tax. If healthy (healthy is important and I will elaborate on this in future discussions) the executive can purchase a 10 Pay $1,000,000 Life Insurance Policy with a Long Term Care Rider.

Summary of Purchase –

Coverage – $1,000,000 Life Insurance with Long Term Care Rider (LTC)

LTC provides for a $20,000 Monthly Benefit. Every LTC benefit reduces the Life Insurance Policy Death Benefit by the amount paid under the LTC Rider.

Cost – A 60 year old with a Preferred Non-Smoker rating can purchase the policy for ten annual payments of $30,000.

The math is compelling. From the $1,000,000 After-Tax the executive has created $1,000,000 of a combined Life Insurance/LTC benefit and still has $700,000 to use for other purposes.

Will executives be receptive to this story? I believe the answer is yes for these two reasons:

1 – They care about their family and want to tell a story about themselves.
2 – They are likely to be at an age where they have recently had to help parents in their last years or they have parent’s of friends in similar situations.

NQnext is committed to helping people tell their stories to their families and friends in a simple way. In the days to come I will be expanding this discussion about the need and the delivery systems of NQnext. Enjoy the day!

REMEMBERING MY FATHER J. MURRAY MARSHALL – 1930 to 2013 – One of my inspirations for the story of NQnext.

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What is NQnext?

NQnext focuses on Non-Qualified Plan participants receiving benefit distributions when they are ages 55 to 70. At this point in their lives they may not need the additional cash flow. There is a good chance however, they understand the benefits of Long Term Care, Life Insurance and Annuities to help them secure their future for themselves, their children or grandchildren.

Many people in this age group have seen their parents or parents of friends near the end of their lives and they understand the importance of  affordable care for individuals in their later years.

The focus of this blog is to create a community of ideas addressing these needs. I personally experienced the end of my own Father’s life and have seen how proper planning can help bring a family together as we helped Dad on his journey in the last two months of his life. His family was able to focus on him. Had Dad not addressed his insurance needs when he was healthy, the end of his life would have been a cause of great stress for all of us who cared for him. As it was, we all had closure. We are at peace. Thank you Dad for taking care of us.

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