Some people lost half of their life’s savings in the stock market twice since the year 2000. As a result, many retirees have decided that they are not willing to place as much trust in the stock market as they did during their working years. The only safe alternative most people are aware of today, however, is to go to the local bank and put the money into a CD paying an absurd interest rate of .09%. To most people this is not very attractive. We work with our clients to find ways to safely average 4-8% without risk of loss. Is that even possible? We can show you how. This type of planning also includes protecting money from nursing home expenses, minimizing taxes, and bypassing the costs and time of probate.
Since the United States stock market crash of 2008, millions of Americans have seen their retirement savings dwindle. Many of these savers had their nest eggs exposed to the equities markets and have subsequently suffered two periods of extreme loss in one decade. This time period has been referred to as “The Lost Decade” for investing and as a result, “Safe Money Places” are getting a lot of attention. Some of these same folks had to actually postpone their retirement and continue to work.
Safe money places are vehicles that are used for the money you cannot afford to lose; they’re accounts that provide peace of mind knowing your principal is protected from loss as a result of market fluctuations. Risk money places, like the stock market, mutual funds, bonds, commodities, and real estate, have no guarantees. While there is potential for HIGH returns in risk money places, there is also the potential of losing everything you invest.
These safe money accounts provide the potential for attractive returns and guaranteed lifetime income, without having to accept the losses of risk money places. Given today’s low interest rates and continued high risk of market fluctuation, a portion of your retirement dollars should always be invested in safe money accounts like Indexed Annuities with Guaranteed Lifetime Income Benefit Riders.
How would you like a guaranteed safe plan that pays gains based on a stock market index return, but protects your principal when the market declines? Heads you win, tails you don’t lose. Your interest rate is linked to an outside source such as a stock market index and you participate in a portion of the gains and you are isolated from the losses. If the stock market index goes down, you do not lose any money; your money is protected.
One of the most popular savings platforms of the last 17 years are called Fixed Index Annuities or FIAs. Essentially, these vehicles allow you to gain market-linked interest, without exposing yourself to the risk of actually being in the market. This interest is credited once a year, typically on an anniversary date, and can never be lost to a subsequent decline.
A fixed index annuity is an alternative for consumers who need safety and want to see their funds increase while at the same time deferring the tax liability. By placing your funds in a fixed index annuity, your account value can only increase. In the case of a fixed index annuity; you get safety, growth potential, tax advantages, beneficiary planning advantages, and a guaranteed income for life.
For more information on Safe Money Strategies, give us a call or email today!