Published October 01, 2012
I once saw a t-shirt with the bold word “RECESSION!” and in very small print below, “I’m not participating!” The perceived message struck a tune with me: Observe the masses, and do the opposite!
Imagine applying this to retirement planning. Maybe, something like this: “Market Loss. I’m not participating!” Or perhaps “Wall Street Uncertainty. Not going to affect my hard-earned nest egg!”
A large concern for many pre-retirees and retirees (55 to 65 years old) is the uncertainty and all-out volatility that exists in today’s traded markets. This keeps them up at night, and not because they’re excited. They’re worried.
The last ten years have been referred to as the Lost Decade. People endured severe damage to their retirement accounts, many to the tune of 20 and 40%. Some recovered, some didn’t—but make no mistake, the ones with the most invested in the traded markets felt it the worst, especially those retiring around that time.
Here’s the deal. There’s a new normal in town. Times have changed. The powerhouse bull markets of the 80s and 90s have segued into and unpredictable and threadbare environment. Volatility is more real than ever, leaving folks approaching retirement skittish, looking for answers, and anxious. It’s not fair that your retirement accounts suffer based on things completely out of your control such as global unrest and political climate.
Enter a new option: a non-market linked investment alternative.
I know what you’re thinking. You’re wondering how you could manage your nest egg with any performance at all in the record low interest rate environment we currently experience without being in traditional market-linked accounts. The options now are CDs paying reprehensibly low interest rates (1% would be a home run these days), money markets boasting meager .75% rates, or bonds that carry inherent interest rate risk as they pivot conversely to go opposite interest rates.
The question is: What can I use to keep my savings safe, but also have it get to work for me?
The answer is the new option: A non market-correlated asset. A true diversification. A great choice. One that rides along impervious to the Wall Street shuffle. One relying on guarantees.
Non-correlated alternatives not only feature no stock market involvement, they feature no relationship to world events. They can in fact, be quite independent and passive, requiring no entrepreneurial effort to create successful growth in a portfolio.
The advent of this alternative avenue has potential to be a true solution and a suitable addition to a stagnant portfolio. The non-correlated approach offers advantages translating to real time financial success.
Facing a headwind in retirement?
These alternatives often dictate exit strategies that are less complex and more vivid for the participant and serve to boost the retiree as a tailwind. They can be implemented to accommodate whatever stage you may be currently planning for: accumulation and/or income planning. Typically income planning can be solved with a non-market linked annuity. Those still in accumulation phase may opt for a unique option such as a life settlement in a collective trust.
Guaranteed income you cannot outlive
Imagine taking time to consult an expert in your mid-fifties on how to use non-market correlated solutions and literally knowing (not hoping) that you’ve secured the income you need in retirement—and it’s guaranteed for life. You can’t outlive the payments, they’re insured, even if you live to be 102. If you predecease your spouse, the income simply goes to him or her. If you both die, any funds left will go to your kids, probate free. A popular annuity allows for this.
Remove uncertainty in your retirement
If you’re nervous, and need solutions that secure your retirement dollars, it may benefit you to take some of your savings and simply not participate in the roller coaster markets.
Then you can wear a t-shirt that reads: “Running out of money in retirement? I refuse to participate!”
Contact retirement planner Jason Hutchins at (317) 660-0929 to learn more about how he infuses retirement plans with these 5 pillars:
1. More choices
2. More time
3. More money
4. Fewer hassles
5. No worries
If you remember only one thing, let it be this: Just because the majority of American retirees are uncertain about retirement doesn’t mean you have to be as well.