Many articles have been written about why seniors should not own annuities. Those articles are only partially correct. There are a few annuities that ARE good investments for seniors. They do not contain high annual fees, will not lose money and they grow every year even in down markets. Some even guarantee a set rate for a specified time, just like a bank CD or IRA. This type of annuity can be an excellent investment for seniors looking for higher interest rates than banks offer.
They offer tax shelters, more liquidity than a CD, avoid probate, compound interest, and can never lose the annual gains. There are no surrender charges upon death. It’s a great way to transfer more wealth to heirs. However: Just like there are bad stocks, bonds and mutual funds, there are bad annuities. But there are many good ones. Some of the inferior annuities are offered by very well known insurance companies.
One big mistake seniors make when investing in an annuity is investing because they feel secure because of the name of the insurance company or bank. They don’t understand what they own, but feel safe. Of course, you need a financially strong company, but you also need a good annuity, too. An independent consultant or advisor with integrity can screen these for you and recommend the best one for your situation. And he or she can tell you if it is not good and why.
• An annuity portfolio provides seniors with a special peace of mind. It provides substantial guaranteed growth without generating annual 1099s. Each year the growth of annuities is credited, locked in, and protected by the legal reserve system of America’s Insurance companies.
• Unlike variable annuities, a better type of annuity bears no administrative fees, no annual maintenance fees, no upkeep expenses, no buy or sell expenses, no management of assets, no people to manage assets.
• An annuity is protected for you, your spouse, children and grandchildren from bankruptcy, creditor’s claims and lawsuits that may arise in your estate when you are no longer there to defend it.
• Unlike the stock market, you do not have to worry about which way the market is moving. You do not have to know when to cash out for a gain, nor do you have to know when to sell and cut losses. You have a no-loss guarantee. Your principal is protected.
• Insurance companies have the legally required reserves and the financial strength to provide the ironclad guarantees of annuities. You may find that there are more safeguards in place than you have with a CD.
You too can have that special peace of mind with the right annuities. If you have an annuity that you are unhappy with or would like to know exactly how yours works, whether it is good and safe or bad and risky, call Lifeguard Financial at 1-440-942-1936 today.
If it is one of the bad ones, wouldn’t you want to know now? Make it a point to call us at 440-942-1936 now with your annuity company’s name. We’ll give you the facts.
STEPS TO MAKING YOUR RETIREMENT LAST
The prospect of outliving the assets in a retirement portfolio is a concern for many retirees and pre-retirees. You may be facing a fixed retirement date that has been chosen for you rather than a date you can control.
Today, retirees are living longer and are finding it challenging to grow their portfolios in today’s challenging markets. Volatile investments, low fixed rates, and uncertainties about taxes have a huge impact on the investment decisions of today’s seniors.
Some investors think that making monthly withdrawals from their nest egg is the best and only way to provide income during retirement. But this strategy comes with serious and sometimes unforeseen financial consequences. To avoid this, you must design a reliable way to receive income.
As you approach your prospective retirement date, it’s certainly best to develop an efficient plan long before the date arrives. However, it’s not too late for those who have already begun retirement to take advantage of some of these strategies:
Start with having funds available in a safe and liquid vehicle. Having too much on hand means your money is not working hard enough for you. To help create a viable income stream, excess funds beyond what you may need for everyday expenses and emergencies should be placed in tax-efficient investments such as tax-free bonds or the right annuities.
Be cautious when looking to generate income from long-term bond funds. Advisors warn against this because when interest rates rise, prices fall and the principal amount suffers a loss. Last month The Wall Street Journal stated that “so-called safe assets are paradoxically not safe right now.”
Inflation
Historically, inflation has increased at a rate of around 3.2% per year. However, in light of today’s tumultuous political landscape, a sudden and significant increase in inflation is entirely possible. Ignoring this possibility could have a severe impact on both your income and investment portfolio in the years ahead. Diversifying your portfolio that includes multiple types of investments is a good way to combat inflation and help protect your assets against an unexpected increase.
Know Your Expenses
The easiest way to track expenses is to simply write down what you spend monthly on things like health care, insurances, mortgages, transportation, taxes, utilities, food, etc. Try to include absolutely everything and then factor in a little more to this amount for the unexpected.
The next step is to calculate your total monthly income including anything you receive from social security, pension(s), dividends, IRA required minimum distributions, etc.
Once you subtract the total amount of projected expenses from the total amount of income, check to see if a deficit would be created in the event that a spouse would pass away and the income they are receiving is lost. If so, it is imperative that you prepare by establishing a longevity income plan now for the surviving spouse.
In closing, only you can control your spending, but Lifeguard Financial can help you reduce fees, control the amount of risk your investments are exposed to, and show you any available ways to lower taxes. When those four factors are under control, you don’t have to earn as much on your investments to experience growth in your portfolio. The key is to carve out a portion of your money and designate it for longevity retirement income for you and your spouse.
If you need assistance, please contact Lifeguard Financial today at 1-800-942-1936 to schedule a free, no-obligation consultation.