Published June 27, 2012
It’s always amazing to me that the two greatest investments a family owns is their house and their retirement account. The odds of a house burning down in their neighborhood are very small and yet they insure their house for its full value. However, in many cases their retirement account is much greater than the value of their house, and they don’t even consider insuring their life savings. They have their money either exposed to the stock market and its volatility or they have their money in low interest-bearing accounts where inflation and taxes are depleting their purchasing power.
What Wall Street Doesn’t Want You to Know
My friend Rick Bueter has written an excellent book titled, The Great Wall Street Retirement Scam: What they don’t want you to know about IRAs, 401(k)s and other retirement plans. This is a must-read for anyone who has a qualified retirement plan or an IRA.
The book is about the retirement system that Wall Street and its financial advisors, those who sell mutual funds and other securities inside your retirement plan, provide. It’s all about the importance of a guaranteed income for life, and how Wall Street has no guarantees for your hard-earned money. It teaches you about the hidden fees that you pay unknowingly and unnecessarily and how these fees can have a tremendous negative impact on your life savings.
David Royer, IRA coach and another one of my mentors, has written an excellent book titled “The Top 10 IRA Mistakes” points out in his study material that a person can pay more in the form of these small hidden fees than they will ever pay in the form of income taxes.
Bueter shares with us in his book that they cannot guarantee you an income for as long as you may live. They won’t even use the word pension in their retirement plans. They are not telling you that “They” don’t have the solution to guarantee retirement income security.
Don’t Lose Your Retirement Funds to a Fickle Market
Over 83% of Americans’ retirement accounts are connected to Wall Street with absolutely no guarantee of principle or earnings. How do people sleep at night knowing that any sort of bad news can shake Wall Street and affect their retirement account in a very negative way? We saw the market have two major corrections during the last decade. Think about this, should you lose 40% of your retirement account, you must earn 66.7% just to get back to even. So the question is do you want to have your retirement account exposed to the volatility and risk of Wall Street? Will you have the time to recover a large loss?
As an instructor who teaches CPAs continuing education, I always ask the question, “Is a qualified plan a tax savings event?” and many, if not most of all the CPAs and accountants answer “YES!” The truth is qualified plans never save taxes, but only postponed them to a later date. Qualified plans are a tax trap set up by our government. You, the individual take all the risk and pay all the hidden fees charged by Wall Street, and your account is not liquid without a penalty. You have very little control of your account and the government will end up with 30 to 40% of your entire retirement account.
Social security income, prescription drugs, and Medicare are already underfunded by over $119 trillion. There are 10,000 boomers signing up for these entitlements on a daily bases. The government has no choice but to raise taxes, lower our benefits, cut services and continue to print ‘fiat’ money.
A New Retirement Solution
There is another system of retirement that has avoided all losses, preserved retirement dreams and secured them with guarantees of income for its participants. It is a system that has existed for over a century and has proven itself, including times when Americans found themselves in the most challenging economies. Even during the Great Depression, this system delivered on its promises. It has been and will continue to be a system that provides millions of Americans certainty, guarantees, and financial security. It is known as the insurance company system of retirement.
Utilizing safe insurance products like annuities, secure retirement is no longer a thing of the past. Products like this can help retirees grow their money tax-deferred guaranteeing a retirement income that they will never outlive. With these types of products, you’re in control, not Wall Street.
Use, liquidity, control and having your principal and accrued earnings guaranteed should be of utmost importance to the massive group of “Baby Boomer” saving for retirement or coming out of the workforce.
If you would like to know how to increase your current monthly cash flow, reduce future taxes; eliminate market risk and the high cost of small hidden fees. You can contact Common Sense Economics For The Family at 888-244-0747.