If you are retired or may soon retire, the preservation and protection of your retirement savings is critical.
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Financial options providing guarantees against market risk and dependable returns are far more practical than other risky alternatives. There are a few facts about retirement assets that are important when considering changes to your retirement finances.
Financial vehicles are designed to provide an income stream immediately or at a future date to be determined. The consumer may make one payment or multiple payments at a time to fund these types of plans.
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The characteristics of these retirement protection vehicles are of particular value and interest to retirees. Generally, retirees are recommended to keep a fairly high percentage of their invested assets in protected alternatives that are not subject to market fluctuation. These options often include immediate increases (bonuses) and guaranteed income that you can never outlive.
Let’s take the example of Rob and Ruth Smith and their $100,000.00 retirement account. When Rob and Ruth came to us, together they devised several options of how to best invest their monies:
- Stash their cash under the mattress for safe-keeping and pull it out of hiding when it was needed.
- Invest directly into the market, take their gains along with their losses, and hope for the best.
- Put their retirement fund, their sacred monies they’ll need to live out their retirement, in a Fixed Indexed Annuity. This proves to be the best option, as they’ll never lose the principle account value and still experience the gains of the upside of the market.
From September 1998 to September 2010, depending on the options they selected, this is what the Smith’s account would have experienced:
The chart above illustrates the best way for the Smith’s to experience an increase in their account value. But what about creating a guaranteed income for life, which is the most important?
That income would be generated off of the $160,747.00…guaranteed for life! Not only does their income value go up, consistent with the performance of the S&P, but once it goes up, it can never go down. Also, the income will continue for the rest of their lives, EVEN IF their account value drops to zero!
This is a unique offering, guaranteeing an increasing income off of a decreasing asset.
The assurance of a steady income doesn’t have to stop when you retire with Fixed Indexed Annuities. There are products designed for people who want to receive lifetime income in the form of partial withdrawals and guaranteed payments.
The guaranteed income benefits of Fixed Indexed Annuities offer flexibility, giving you a choice from three different payment options to suit your needs.
You can read more from Jack Albertson at www.albertsonfinancial.com