Tag: fixed indexed annuities
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Indexed Annuitiy: A $200 Billion Market
Should you have a portion of your retirement assets in an indexed annuity? There is a great deal of information about how to allocate retirement assets. A fixed indexed annuity offers upside with virtually no downside.
- If you want to create an income stream that is guaranteed for life, an indexed annuity may be the right tool.
- If you want to protect your principal and receive a guarantee that you will NEVER lose it, you may want to consider an indexed annuity.
- If you want market gains without market losses, a fixed indexed annuity will provide this “market insurance”.
- Only an insurance company can guarantee 100% principal protection and income for life.
Americans concerned about security in retirement are buying more than $200B of indexed annuities. Watch the video below to learn about the advantages of using a fixed indexed annuity versus variable annuities that continue falling out of favor for retirement planning.
https://limra-1.wistia.com/medias/4yknawcnnn
Please contact me at 561-869-4500 or email me about a complementary consultation for indexed annuities and a review of your coverage.
You can visit us at www.facebook.com/lifecycleplanners
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Annuities & Disappearing Surrender Charges
Surrender charges on fee-based variable annuities seem to be retreating faster than the polar ice caps, new filings reveal.
“These advisor-sold contracts typically have no surrender or a very short surrender (period) with very low penalties,” said Kevin Loffredi, senior product manager, annuity solutions, for Morningstar.
Surrender charges penalize an annuity contract holder for canceling the contract before a certain date. They also allow insurance companies to recoup their commissions paid upfront to advisors on the sale of a commission-based contract.
http://insurancenewsnetmagazine.com/article/surrender-charges-disappearing-act-3332#.WYoxfxPyuUk
For annuity buyers, contracts with shorter or no surrender penalties is advantageous. In the past several months, there has been a rush of insurance companies introducing products with better surrender charge solutions. The challenge for them will be distribution.
Please contact me at 561-869-4500 or email me, Ted Bernstein, about a complementary consultation about indexed annuities and your specific needs. You can visit us at www.facebook.com/lifecycleplanners
ted bernstein boca raton florida
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Power of Indexed Annuities
Indexed Annuities – The Facts:
Using Fixed Indexed Annuities, insurance companies guarantee lifetime income for a critical part of your retirement plan. Annuities are not investments. Instead, they are contracts you enter with multi-billion dollar financial institutions that are regulated by 50 states. To maintain Triple A ratings, they are transparent to regulators and are considered to be extremely conservative.
- Insurance companies have higher reserve requirements than banks.
- Insurance companies must comply with strict investment guidelines.
- The 30-year bull market in bonds may be over. The Fed has said it will continue to raise interest rates, which is not good for bond owners, especially open-ended mutual fund bond owners. Now is a great time to protect gains and protect retirement assets with a principal protected, lifetime income solution.
- The right annuities, fixed indexed ones, can participate in the some upside of the markets, without any downside risk. This allows you to participate in potential stock market growth without the anxiety from the roller coaster of stock market losses.
- There are contracts with 100% liquidity from day one – a full return of premium if you want out for any reason. These are special contracts not offered by everyone.
- When stock market returns are negative, your annuity is credited at zero percent. When the markets are positive again, you will participate in a portion of the upside. This is a tremendous benefit during down years and bear markets.
- Annuities provide higher income payouts as you get older. The longer you wait, the higher your guaranteed payout will be.
- Annuities can provide guaranteed income for both spouses. The guaranteed income may continue for as long as the surviving spouse is alive. The life expectancy for two lives is much longer.
- Some contracts DOUBLE the income payment for long term health care costs in the event you cannot perform two out of six Activities of Daily Living.
- Upon the owner’s death, any unused principal will be transferred to the beneficiaries. The amount of money you contribute, plus all gains credited to your contract, will pass to your heirs.
Please contact me at 561-869-4500 or email me, Ted Bernstein, about a complementary consultation about indexed annuities and your specific needs. You can visit us at www.facebook.com/lifecycleplanners
ted bernstein boca raton
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10 Most Common Retirement Threats – Protect Your Nest Egg
Watch out for these common retirement threats to your nest-egg.
Follow these risk proof retirement tips:
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Longevity Risk: Considered by many to be the most dangerous of all retirement threats as life expectancy continues to increase. To mitigate longevity risk, you want to convert lump-sum retirement assets into guaranteed income streams for life. This retirement threat acts as a multiplier to all the other risks. Longevity risk is the risk of outliving your assets.
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Insufficient Lifetime Income: A sustained period of near zero percent interest rates on safe investments and the evolution from government and corporate pensions to the privatization of retirement accounts has left many people without sufficient amounts of reliable income for life. Retirees today must reconsider what liquidity means in retirement. What percentage of your nest egg should be in lump investments versus guaranteed lifetime income you cannot outlive? What is the right percentage of each to ensure you don’t run out of gas and run the risk of outliving your assets?
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Inflation: With interest rates at historic lows, inflation is a major retirement threat. Learning the secrets about the strategies to manage this “silent” threat is invaluable knowledge. Like un-managed high blood pressure, inflation causes damage that can go un-noticed for too long. Periods of low interest rates are often confused for periods of “no inflation”. Inflation is especially threatening to your nest egg due to limited options to replenish principle.
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Incorrect Asset Allocation: The proper asset allocation in retirement is critical. Why do so many retirement aged people say a stock market correction or rising interest rates is keeping them awake at night? IT DOES NOT HAVE TO. Learn the right allocation strategies for a simpler retirement.
If you make one change today, increase the amount of guaranteed income from indexed, income annuities.
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Rising Medical Costs: The retirement threat considered by many to be the one capable of immediate damage to a nest egg.
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Loss of Spouse & Dementia– Both married couples and single retirees can expect to deal with the real issue of potential dementia in the aging process. For married couples, the loss of a spouse often compounds these challenges and has proven to be one of the most significant retirement threats, especially when one spouse has primary responsibility for overseeing the retirement plan. Leading economists and retirement scholars agree about the benefits of guaranteed income you cannot outlive.
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Investment Scams: Be careful of “too good to be true” investments. I have very good radar for scams. Feel free to contact me for an opinion.
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Fees: Fees and other charges are similar to taxes levied against your investments. They are disclosed, easy to measure and they add up.
4. Bad Advice: You know it when you see it. I meet with people in or near retirement every day whose number one objective is “no losses”. Yet, they’re retirement assets are invested in stocks and bonds. It never hurts to get another opinion and having a team of professionals with different disciplines is good prevention. Just make sure one of them is a retirement income specialist.
5. Market Losses: Right up there with longevity risk, market losses can be the most devastating retirement threat. You cannot afford losses in retirement. You don’t have income to replenish them and you don’t have the time needed to overcome them. A fixed income annuity keeps you invested with no losses, EVER.
This is just a partial list of retirement threats to your nest egg. The key to security in retirement is to make sure you are not vulnerable to any of these threats. With the right strategy, you can eliminate every risk to your nest egg that leads to peace of mind you may not currently enjoy.
Please call me at 561-869-4500 or email me, Ted Bernstein, about a complementary consultation about your specific needs.
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Why Income Annuities Are Better Than Bonds
What is the difference between bonds in retirement and annuities?
The Wall Street Journal described income annuities as “super bonds”.
Within the backdrop of retirement planning, annuities are often compared to bonds and vice versa. They are different. It is important to know their differences in order to appreciate the superior qualities of an income annuity for retirement income purposes.
Shortcomings of Bonds:
• A bond or a bond portfolio cannot provide guaranteed income for life.
• A bond or a bond portfolio does not guarantee results, of any kind.
• Bonds and bond portfolios have default risk that bondholders accept without any kind of insurance (General Motors is a recent example of worthless bonds that offered investors no recourse).
• Bonds are usually not redeemable early without an early withdrawal penalty.The advantages of Fixed Indexed Annuities:
1. Guaranteed income you cannot outlive, no matter what;
2. No principal loss, ever;
3. Market upside when markets are up; and
4. 100% liquidity from day one.
5. Backed by insurance companies with strict reserving regulations and state guaranty funds.
Below are powerful conclusions from one of the leading retirement scholars in the world, Professor Wade Pfau. According to Professor Pfau:
“The funds used to buy a fixed deferred income annuity should be viewed as a substitute for a bond investment when evaluating a holistic retirement portfolio.”
“Our findings suggest that a short deferral income annuity can both reduce the cost of funding retirement and provide important behavioral benefits to clients concerned about near retirement market performance.”
“Managing assets to create income becomes a significant challenge for the increasing percentage of Americans who suffer from dementia in old age. A retiree can reduce all of these risks through the purchase today of a guaranteed income stream in the future…”
“A Deferred Income Annuity can also be beneficial as insurance to protect against the risk of outliving assets either due to poor investment performance or reduced cognitive ability in old age.”
Using the right income annuities will simplify retirement planning and provide guaranteed results.
Please call 561-869-4500 or email me, Ted Bernstein, to continue our discussions for your specific needs.
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New York Times: ‘Consider An Annuity’ In Retirement
This retirement story in the New York Times, How to make your money last as long as you do, hit the bullseye by explaining how annuities provide guaranteed, lifetime income in retirement.
“Consider an annuity”… [Retirees] will always have enough to cover essential living expenses, no matter how long they live or how badly their investments perform.”With a portion of your retirement funds in the right type of annuity, the principal is protected by creating guaranteed income that will last “as long as you do”. As you get older, the amount of income increases and will not level off until you begin to draw a paycheck from the contract.
In other words, anyone who wants absolute security in retirement should take advantage of this special kind of annuity.
No other retirement solution offers 100% principal protection, participation in market gains, tax deferral, favorable taxation on distribution, liquid from day one and no commissions paid by you or your account.
Consider an annuity if you are:
- Married and in, or near retirement.
- Want dependable, predictable income for life.
- Single, in or near retirement.
- Seeking a simple and safe solution built entirely on guarantees.
- Interested in transparency, disclosure and regulated products.
- Seeking guaranteed income for life with NO principal risk.
ROI in retirement is reliability of income.
With the New York Times suggesting that people “consider an annuity” to make their money last as long as they do is supportive of everything that is stressed by economists and professors all over the world. Guaranteed, lifetime income in retirement is finally beginning to receive mainstream attention.
Do you have assets in an IRA? Read this.
If you would like to meet or talk by phone, please email Ted Bernstein or call me at: 561-869-4500
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Today Show: Make your money last with an annuity
The Today Show this week includes an important recommendation about guaranteed, lifetime income. Although 2016 was a banner year for indexed annuities, we have a long way to go. Too many people do not understand indexed annuities and as a result, they are still measuring their retirement security by the size of their portfolios. As this story points out, you want to “convert” your retirement assets into an income stream that will last as long as you do. Guaranteed income in retirement is the gold standard for security.
“Building block 2: A Fixed Annuity.
Consider converting a portion of your nest egg into a fixed, immediate or deferred annuity that will cover the gap. Essentially, you’re using part of your nest egg to buy a paycheck that can be structured to last as long as you (and perhaps your spouse) live.”
http://www.today.com/series/starttoday/jean-chatzky-how-make-your-money-last-after-retirement-t106561
If absolute security is a primary retirement goal for you, please contact me to arrange a discussion about guaranteed income solutions. There are dozens of threats to your nest egg in retirement and I will explain how to mitigate them with the power of guaranteed income contracts. You will not learn about these strategies from traditional money managers. You can email me or call me directly at 561-869-4500
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ROI = Reliability of Income
In Retirement, ROI is Reliability of Income. Helping you shift your focus from asset accumulation to guaranteed income will create more security in your retirement plan. Economists, professors and thought leaders all over the world are helping planners and their clients change the dialogue about why sufficient levels of lifetime income are more beneficial and valuable than asset accumulation in retirement. If your goal is maximum security without principal risk, you will benefit from this shift in focus.
The financial risks of living longer.
We strive to create a long, healthy and enjoyable retirement. That is a reality if you are well positioned in retirement with reliable sources of income supporting your lifestyle. The financial downside of living longer is the increased risk of outliving your wealth – referred to as longevity risk. Many professors and economists believe it is the single biggest threat in retirement.
Warren Buffett (that wise, wise man from Nebraska) said, “that in order to succeed, you must first survive.”
When it comes to retirement income, investors are dramatically underfunded, but that trend might be changing: Willis Towers Watson’s 2016 Global Benefits Attitudes Survey found 59 percent of millennials and 66 percent of Baby Boomers are willing to pay a higher amount for a guaranteed retirement benefit. The data suggests that people with guaranteed income in retirement are happier than those without it.
Protecting your spouse.
For couples, joint annuities allow a steady flow of income during each spouse’s lifetime and after the first death. Compared with a single-life payout, a joint payout will pay less each year, but the guaranteed lifetime income for your spouse will take care of her in a way that nothing else can. Managing a complex investment portfolio for a surviving spouse is challenging on nearly every level. Converting your retirement assets into guaranteed income streams is retirement planning state of the art. The assets remain 100% liquid and there can be no losses. Gains are added to the principal.
Further, I believe that guaranteed monthly income payments are perfectly suited to offset the risks of health changes and normal cognitive declines.
How to Manage Longevity Risk.
Ideally, you need guaranteed, lifetime income streams that provide income for as long as you are alive, under any conditions. You, nor your spouse, can outlive guaranteed, lifetime payments from an insurance company. Too many people in or near retirement are invested too heavily in the stock market, creating a real threat to their nest egg when the market has a normal correction. By re-balancing your portfolio, you can move these assets out of harms way and put a protective wrapper around them.
Absolute security in retirement requires that you convert a portion of your retirement assets, including IRA monies, into reliable lifetime income from insured contracts that create guaranteed income from insurance companies. Working with experienced retirement professionals ensures your heirs will receive all unpaid principal if that is your goal.
According to Yale Professor, Roger Ibbotsen:
“Investors should be willing to pay an insurance premium to hedge away the longevity risk.”
You need guaranteed income solution if you are:
- At or planning for retirement.
- Concerned about outliving your money.
- Concerned about spouse’s well-being upon your death.
- Currently have retirement assets invested in bonds, stocks or real estate.
- Have insufficient guaranteed lifetime income.
- Concerned about losing investment control as you get older or if health is compromised.
- Do not have a plan for retirement or longevity risk.
- Concerned about outliving your money.
A Private Pension – How it Works.
There is no principal risk. A longevity annuity is designed using indexing strategies. Simply put, this means there is a guaranteed floor of 0% and reduced gains on the upside. When the market is up, the contract will capture some of the gains and when the market is down, there are NO LOSSES as you contractually cannot earn less than 0%.
Return of Premium – I recommend contracts that are 100% liquid from day one (minus any disclosed contract fees). With this special guarantee in place, you are protected from unforeseen events or a bad decision. With all of your capital GUARANTEED and LIQUID, you have the freedom to take advantage of “better” contracts if it makes sense to do so in the future. Without the traditional surrender penalties levied against your account if you change your mind, threats from inflation are minimized.
Mortality Credits.
There is no other investment that guarantees income for life without ANY principal loss – ever. Because insurance companies create assets called mortality credits and then share them with their annuity clients, they are able to do what no other investor or company can do. The word guarantee does not apply to the world of equities. Longevity annuities are built around guarantees and this is quite a distinction offering you real choices.
Income for life, 100% liquid from day one, guaranteed principal protection and tax deferred growth. A secure retirement plan should be built on this foundation. An advisor who is experienced in retirement and longevity planning will prove to be invaluable to helping you create reliable income you cannot outlive. In retirement, an income advisor will become the most important member of your team.
If guaranteed lifetime income is a primary retirement goal for you, please contact me to arrange a discussion about helping you with retirement security and the power of guaranteed income. You will not learn about these strategies from traditional money managers. Please email me or call Ted Bernstein directly at 561-869-4500.
Ted Bernstein, Life Cycle Financial Planners
- At or planning for retirement.
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Everyday Tips For Longevity In Retirement.
1. Time passes faster every day. Don’t make it worse by rushing and stressing over time. Where are you going?
2. Take care of your body so it will take care of you later. Don’t let your world get smaller each day – stay fit and mobile.
3. Intimacy and friendships remain important regardless of where you are on the life cycle spectrum.
4. Healthy relationships are the most important thing in your life. Steve Jobs at end of life:
While the above-quoted essay does not represent either Steve Jobs’ final words nor remarks he made (in either oral or written form) at any time during his life, his biographer Walter Isaacson did record Jobs’ expressing regret at the end of his life about how he raised his children:
“I wanted my kids to know me,” Mr Isaacson recalled Mr Jobs saying, in a posthumous tribute the biographer wrote for Time magazine. “I wasn’t always there for them, and I wanted them to know why and to understand what I did.”
“He was very human. He was so much more of a real person than most people know. That’s what made him so great,” he added. “Steve made choices. I asked him if he was glad that he had kids, and he said, ‘It’s 10,000 times better than anything I’ve ever done’.”
It wasn’t always thus. In the early stages of his career, Jobs, who was adopted, denied being the father of Lisa and insisted in court documents that he was “sterile and infertile”. He acknowledged paternity when she was six, and they were later reconciled.
5. Money talks. It says “Goodbye.” If you don’t convert assets in the market into guaranteed lifetime income, you’ll wish you had. And then it’s too late.
6. Many of the seeds you planted in the past, some good and some bad, will begin to bear fruit and affect the quality of your life as you get older.
7. Acceptance is grace, freedom and peacefulness.
8. Don’t let your possessions own you. Consider them on the trouble vs. enjoyment scale. Simple but enlightening.
9. You may regret some things you didn’t do far more than the ones you did that were “wrong”. If you get the chance — do them. You may not get the chance again.
10. Every day you wake up is a gift.
11. Converting retirement assets – stocks, bonds, CDs and Treasury’s – into a Longevity Annuity will eliminate risk, guarantee income for life, allow you to enjoy retirement and sleep at night. Do you want to receive guaranteed monthly income, paid to you no matter what? Or, do you want to be responsible to mange a complex investment portfolio into your 80’s and 90’s? Talk to friends and others who receive large amounts of guaranteed, lifetime income and ask them for their opinion about this critical issue.
If guaranteed lifetime income is a primary retirement goal for you, please contact me to arrange a no obligation discussion about my views concerning retirement security. There are dozens of threats to your nest egg in retirement and I will explain the power of guaranteed income contracts and why you will never learn about these strategies from traditional money managers. You can email me or call me directly at 561-869-4500.
