Are you frustrated with record low interest rates on your savings accounts, money markets, CDs and Treasury’s?
How will you overcome the low yield crisis? The Wall Street Journal said that “retirees could perceive these low rates as getting both feet stomped on and then kicked in the knee”.
Whether your money is in cds, money markets, treasury’s or savings accounts, the rates are near zero. Add fees and taxes to the mix and the real rate is just about zero percent.
There is a 200 year old investment option that is often overlooked but it guarantees higher rates. In fact, the current annual fixed rate is 2.45%. Even better, the income is not taxable until it is withdrawn, unlike other investments which tax the growth each year.
With the Federal Reserve signaling that benchmark, short term interest rates would likely be held near zero until 2023, many may be reminded of the period following the last recession, which lasted for seven years. The Wall Street Journal, September, 2020
Adding insult to injury, the Fed confirmed that near zero rates will be with us through 2023, with no plans to increase them. This week, Maria Bartaromo predicted that rates will not rise until 2025! At this point, we have to believe the Fed about rates, it’s been 10 years. Some banks have announced they will soon be at NEGATIVE RATES, while still charging fees. If that is not bad enough, there are annual income taxes on these paltry returns. With traditional investments paying zero percent, safe options quickly come into consideration.
Short term CD rates are at 0.03% while saving accounts and money market rates are less. The Guaranteed Alternate Income Network (GAIN) helps consumers locate better short term solutions. For example, one great option is an indexed annuity that is liquid and currently paying a GUARANTEED ANNUAL RATE of 2.45%. The advantages are:
- 100% liquid. 100% guaranteed.
- 2.45% fixed rate of return.
- More than 2.45% is possible by allocating to the indexed funds, without taking any principal risk. The index rates are NEVER less than 0%.
- All gains are kept and can never be lost.
- No principal risk; no market risk.
- No surrender charges; small market value adjustment on early year surrender can be positive, or negative.
- Tax deferred.
- Protected by multi-billion-dollar insurance companies with superior ratings.
Financial Engineering: Instead of using indexed annuities with built-in commissions, we utilize fee-based alternatives to boost the early year liquidity. The fees are a fraction of the traditional commissions that are built into annuity products. To the benefit of all stakeholders, this is state-of-the-art value creation which leads to better returns than investors can get in traditional savings vehicles. Alternatives like these minimize the individual risks and maximize the safe, upside potential.
What makes this so much better?
As individual investors, we can not match the investment skill or the scale of insurance companies. With the brightest investment people working 24/7, these teams are investing billions on a daily basis. As individual investors with far less to invest, we simply cannot commit daily focus to our investments, without sacrificing attention from other areas of our lives. This option creates a partnership between you and the insurance company. You share in the upside when markets are up, without taking any principal risk. It’s Win/Win.
How Much Interest Can I earn? A popular option these days is the fixed account rate that is currently paying 2.45%. Or, you can choose an index linked to the S&P. In fact, many people choose a blended option that creates a level of guaranteed income plus significant income potential. Interest rates as high as 5% are possible through volatility controlled indexes, without any principal risk. After fees, the returns are far superior to the returns in savings accounts, money markets, CDs and Treasury’s. Furthermore, you are completely shielded from any market risk.
We are facing the real possibility of negative savings rates. Imagine paying a bank to hold your money? It doesn’t seem possible but neither did ten years of these rates seem possible a few years ago.
In the future, if rates do move up and you find better ones, you can liquidate with no surrender penalties. However, it is important to note that higher rates elsewhere will likely lead to insurance companies increasing their fixed rates as well.
We sell security, not securities. Contact us and we will answer all your questions. You have nothing to lose by taking a complimentary phone call or requesting a customized quote.
Start the ball rolling by simply filling out the contact form on this page or any page of our website. You can reach us at 561-771-4647 or 561-869-4500.
For more information about short term interest vehicles, click here:
How long will interest rates remain low, click here: