I wanted to ask you a question. Picture yourself getting buckled in on a flight, headed to San Diego from New York. You’ve got your favorite book, some good snacks, and you’re ready to go. Then the pilot gets on the intercom and says, “Ladies and Gentlemen, thank you for flying with us. The weather in San Diego looks to be perfect, 70 degrees and sunny, and our flight should take about four hours or so. However, due to some inclement weather, we only have about a 65% chance of arriving safely. Now, sit back, relax, and enjoy your flight.” 65% chance. Question is, would you stay on that plane?
Now, let’s relate that to your retirement. If you only had a 65% chance of a successful retirement, would you be comfortable with that? A successful retirement is defined as getting to life expectancy before you run out of money.
Our goal here today is to show you how to take your retirement into your own hands and use an annuity to alleviate some uncertainty, all while earning a 35% bonus.
Today we’re going to cover three things. First, we’re going to talk about what an annuity is, and how to obtain this limited time 35% bonus, second, some current events that are causing uncertainty in the financial world, and number three, how the annuity functions versus leaving money from your IRA and 401-K in the stock market.
First, an annuity is simply an agreement with you and the insurance company. Annuities really are one of the best ways to safely generate income for retirement because they have a 0% floor, which means you’ll never see your account value go down in a negative market.
Think of it like Social Security. You pay into it and when you’re ready, you’ll receive a stream of income as long as you or your spouse are alive.
Right now one of our insurance companies we work with is actually offering a 35% bonus. The good news for you is annuities work, whether or not your nest egg account value is up or it’s down.
If it’s up, this is a perfect time to do what we call harvesting your gains. You’ve done such a good job contributing to your retirement account and you’ve got some substantial gains in there. Now, let’s lock in those gains and add another 35% bonus.
If you suffered some loss due to recent volatility in the market, then the 35% bonus is actually a great way for you to recoup those losses and get back to where you want to be. Easy math tells us that if you have a million dollars, that’s literally $350,000 as a bonus.
Let’s talk about the current events that are causing some uncertainty. First, we’ll talk about inflation. The inflation rate this year is reported to be 7.5%, which is actually a 40-year high. The cost of goods and services has been increasing very rapidly due to the pent-up demand of buyers and the money supply is actually growing faster than production. The question is, are you going to retire on a fixed-level income? Is Social Security cost of living enough? Luckily, the annuity mentioned above offers an increasing income that is meant to outpace inflation.
Next, let’s talk about the rate hikes. Interest rates refer to the cost someone pays to use other people’s money. The Fed is predicted to potentially have seven interest rate hikes this year. The cost of money will go up, which would tighten spending across the board and affect earnings for certain companies.
But the good news is this is hopefully going to cool down the red-hot inflation that we’ve been seeing.
Let’s talk about debt. Debt in our country has actually reached $30 trillion for the first time ever and our debt to gross domestic product ratio is actually over 130%. That’s a little alarming. $5 trillion of that debt alone has come from COVID thus far. With as much debt that our country has right now, it has to get you thinking, what is going to happen to taxes?
Based on what I just shared about our national debt, do you feel income taxes will rise, fall or stay the same in the future? A Roth conversion of some of your qualified money (IRA or 401-k) might help you if you feel income taxes might rise in the future. Speak to your tax advisor this year and see if you would be in a favorable tax situation this year to converts part of these funds to a Roth.
What about volatility that we are experiencing. What are some factors that cause market volatility? The list, of course, does not include all of the sources of volatility, but let’s talk about a few. There’s an anticipated seven interest rate hikes this year, which causes fear in investors. The cost of money goes up. Quarterly earnings reports from these large companies that are not always favorable can also cause volatility. We have geopolitical uncertainty, and, of course, ongoing pandemic issues.
Did you know longevity, is actually a risk multiplier of all of these issues? The average age of retirement for men is 65 and 62 for women. Studies show that a healthy 65-year-old has a 43% chance of living to age 90, and a female has a 54% chance.
It’s not a question that these scenarios mentioned above will happen in your retirement, no, it’s how many times will they happen, and is your portfolio prepared to handle all this risk?
To reduce the risk to your portfolio so it is not as affected by market swings, adding annuities to your portfolio will assist in reducing the risk to your portfolio because some percentage of your portfolio will not react to these market risk. This portion of your portfolio will be stable and provide no loss to market risk plus this portion of your portfolio will provide guaranteed income year in and year out. Providing your overall portfolio, a more even income that you can withdraw annually.
The money you have left in stocks, bonds or mutual funds will go longer with the stability of an annuity and if you take out an annuity that grows in income over time it can replace money you lose, as your securities go to zero over time.
I would like to provide you with a free evaluation of your retirement assets, let me show you how I can provide you with a more certain retirement. You will be able to have a worry-free retirement with more certainty of never going broke.
Call Mel Samick at 888-839-3536 for a free retirement assessment.