How do you Protect your Money?

How do you Protect your Money?

A major concern for many of my clients who are nearing retirement is how to protect their hard earned money from future down turns in the market.  Did you suffer a loss in 2008?

According to the Federal Reserve, between 2007 and 2010, median U.S. household net worth Dropped by 39%.

People nearing retirement should be smarter about managing the market risk in their retriement accounts if a drop in networth is concerning to them.

Clients who are relying on their 401K's and other retirement accounts may be glad to know there is a safe way to protect savings from "market corrections".  I dislike the term market correction, that's what my former financial adviser called it when I screamed bloody murder over my 401K losses.

What you can do to protect your 401K is request an in-service withdrawl (take your money out of your account and place it somewhere with no market risk).  You request a direct rollover of the money you want protected to an IRA with an insurance company.

Typically at 59 1/2 and older you can request a direct roll-over of your 401K funds from an employer sponsored program into an IRA.

There is no tax penalty for moving money from your qualified 401K to a qualified IRA.

I quote from a January 6, 2014 Money Market article by Steve Vernon called "How Long Will Your Retirment Saving Last?"  "One way to avoid running out of money before you die is to buy an annuity from an insurance company, which guarantee's you a monthly payment no matter how long you live and no matter what happens in the economy.

Unfortunately, many people don't buy annuities, but instead keep their savings invested in the stock market and make withdrawals to cover their living expenses.  Another mistake is not having a formal plan for withdrawing money......."

For many clients using and in-service withdrawal from a qualified plan to fund a fixed indexed annuity with a guaranteed lifetime retirement income benefit is a good way to protect at least your basic financial needs when you retire.

This provides a secure lifetime income with money in your mailbox every month.

Make sure to seek good financial advice to choose the appropriate fixed indexed annuity for your circumstances.

Please feel free to contact me with any questions.

Cory Payne

Beehive Insurance Retirement Planning Services

cpayne@beehiveinsurance.com

801-685-6860

Some Secrets to Understanding Annuities

Some Secrets to Understanding Annuities

Below are 3 annuity questions and the answers that I've recently discussed with clients.

Q.  All Annuites work the same, right? 

Mackinac Island

A.  Not at all.  Most people think of annuities like this: I get a payment every month from my annuity for $3,000 and if I die my wife gets 1/2 of that amount or $1,500 per month and when she dies, the annuity dies.

That's how it used to be, but not today.

Today, You can get a payment for $3,000 a month and if you die your wife will continue to get $3,000 per month for as long as she lives and when she dies, any remaining money in the plan will go to your children/beneficiaries.

Since there are 10,000 baby boomers retiring each day, annuities have come a long way to meet those needs.  What we do in our appointment process is show you which one is best for you based on how much safe and secure income you desire.

Because we're independent we can show you many different companies.  Our clients love the learning process of how to retire successfully.

Q.  How come my Advisor didn't recommend annuities?

A.  Perhaps your broker doesn't spend all of his time working just with retiree's.  We have found that most people in retirement don't want their income to go up and down with the stock market.

Yes, people like all the gains of the market but the 55% market loss of  2007-2009 left many people wanting more safety and protecion for their money.  

Most retiree's like predictability and they like knowing that their income will not stop for the rest of their lives.  

Q.  The plan I've developed for myself works as long as the market returns 6% a year as it has for the last 100 years, why should I do your plan?

A.  Maybe you should not.  If you're comfortable taking risk, meaning spending your money as the market goes down, then maybe you're okay where you are.

Our approach works even when the market declines.  If you're comfortable with money in the market, you should have some of it there.  We beleive in protecting your income stream regardless of good or bad times in the Market.

If you have money something to remember is "risk is for those trying to get where you are already", don't mess it up.  Many people if they'll just not lose their money can have all their future income needs met in retirement. 

Successfully Retire.

Cory Payne

Beehive Insurance Retirement Planning Services

cpayne@beehiveinsurance.com

801-685-6860

Here's the Hottest Thing out there for Retirement Income

Need Retirement Income?

Here is the Hottest Thing out There.

The above title is not mine, it's a headline from a TIME Magazine article dated June 16, 2014 by Dan Kadlec.  The decision to self mange your retirement wealth can be risky business.  Would you like to see a safe way others are choosing? 

Below are quotes from the article to help our discussion today.

"Annuity sales are exploding higher as retiree's look to lock up guaranteed lifetime income"  

"Lifetime income has emerged as perhaps the biggest retirement challenge of our age."

"The push is on to help these retirees convert their 401(K) and IRA savings to a guaranteed income stream."

"In a sign of wise planning, easy-to-understand basic income annuities are among the greatest growing of these insurance products."

"In all, net annuity sales reached $56,1 Billion in the first quarter"

"Meanwhile, net sales of fixed annuities, which offer more certain returns, surged to levels last seen in the rush to safety at the height of the Great Recession-totaling $22.6 billion for the quarter."

Immediate annuities are what most investors think of when they ponder buying and income stream. With an immediate annuity you plunk down cash and begin receiving pre-set guaranteed income over a period of, say 10 or 20 years, or life.

"Another type of fixed annuity, called a deferred income annuity or longevity annuity, lets you put down a lump sum in return for income that starts years later--think of it as a form of insurance for old age."

I had a client in my office this week to discuss his retirement strategy.  At age 60 he's done very well for himself and expects the same during retirement.  For him the solution was a deferred income annuity starting at age 66 which guarantee's he and his wife will have healthy retirement income for the rest of their lives.

Another client came in wanting guaranteed income to start now.  She was 62 and single, she had received a pay check each month and she and wanted the same dependable monthly income in retirement.  She had saved well and wanted safety. An immediate income annuity was her solution with money coming in now and protection for peace of mind. 

Another important decision is when to retire.  An annuity can help with that decision.  You may be able to retire now or know when is the best time with guaranteed money in your mailbox each month.

Some people seem to consider buying an annuity as a gamble, in which one has to live a certain number of years to break even.  With the guarantee of any remaining principal, interest and bonus income being returned to beneficiaries their really is no gamble.  But you need to make sure your product has these built in guarantees as not all annuities are created equal. 

Another concern for many is turning some their money over to an insurance company.  I've seen insurance companies pay claims for the past 35 years. Insurance companies are considered one of the safest places to place your money.

I thought I was in control of my retirement with conservative investments in my 401K when the Great Recession took 42% of my nest egg.  I value the security offered by these A rated insurance companies.

The decision of self managing your retirement wealth can be risky business.  I recommend insuring a successful retirement with a portion of your retirement savings placed with a strong insurance carrier.

Please let me know if you'd like a free no pressure consultation about your retirement concerns.

Cory Payne

Beehive Insurance Retirement Planning Services

cpayne@beehiveinsurance.com

801-685-6860