Do you know how retiree’s are challenged with low interest rates, a volatile stock market and unprecedented longevity?

 

Today’s low interest rates cause people to deposit money and search for the highest yield instead of investing for growth or total return. Inflation, the silent killer, lulls retirees to sleep with it’s steady, methodical increases. Eventually they realize that their next car will cost more than their first house. Another effect is that people assume unnecessary risks in order to maintain their standard of living, or they just “cut back” and make due with what they have.

 

A nice elderly couple that I met with in the past year needed more income so they had purchased uninsured notes solicited through the mail that paid them 11% interest when CD’s were paying between 1% to 2%. I ordered a prospectus and showed them the section that said “You can lose all your money”. They assured me that the checks had been coming for over three years and that they were confident that they would continue. After the husband passed away in March 2004, I convinced his wife to sell the notes and invest the money in the “Income For Life Model”. We did that in July 2004. In November 2004 the company that issued the notes went bankrupt. The Philadelphia Inquirer interviewed several investors that had lost their entire life savings. Some, being as much as $450,000, a substantial amount of money by any means. The inherent risks were realized.

 

We provide a proven process of guaranteed, inflation adjusted income that can last for over 25 years and provide peace of mind and confidence for a secure retirement.

 

A client’s deposit is allocated to six “segments” that will hold invested assets ranging from very conservative to aggressive. Segment one, the most conservative, receives the largest portion of the deposit-28%. Successive segments receive 26%, 20%, 13%, 7% and 6% (total, 100%). The segments receiving the smallest amount of money are those which hold progressively more aggressive investments. The more aggressive an investment, the more risk it is subject to. These segments will be held for the longest period of time in order to achieve the best possible chance of excellent investment results.

Initially, a guaranteed income will be provided by a fixed, single premium immediate annuity for a period of sixty months. For each subsequent five year period, additional segments will be successively converted into similar guaranteed, fixed income streams. At your death, ay remaining assets will pass to the beneficiaries.

 

Our proven process eliminates the fear of running out of money by providing a guaranteed, increasing income stream that you cannot outlive. For more information about how you can obtain “Income for Life”, visit our website at www.familywealth.info or call 1-877-507-9770.

 

Did you know that a 50% loss requires a 100% gain to get back to where you started? A long climb out of the Black Hole only means you’re back to where you started. Over the “long-term” you’ve got a good chance of doing well in the “market”, but shorter term there there may be more risk than you realize. If your money is needed near-term, or if you’ve barely enough to pay for a long retirement, be cautious because there are both bear and bull markets. How can the “market” have a bearing on your retirement?

If the money you’ve saved, including your 401(k) or comparable employer-sponsored pension plan, will be your sole source of support for retirement, you can’t afford to gamble. Your investments will be your income from now on through “old age”. See, it used to be that people worked until age 65 and they were dead by age 72. It didn’t matter, you couldn’t screw it up. Just invest in CD’s because inflation didn’t matter. By the way, “old age” is not what it used to be because medical advances have increased expected life spans substantially. In fact, if you and your spouse are both age 65, there is about a 50% probability that one of you will live to age 90 and a 25% chance at least one of you will reach age 95. This means the cost of your retirement will be greater – not only because you live longer, but with advancing age comes the likelihood you’ll need additional money for medical care, which increases much greater than the CPI (consumer price index). What happens if you retire and it’s 2000,2001 and 2002 all over again? What if you no longer have an income from working and the market crashes? What happens if you live to age 95 rather than 83, and you need to pay someone to help you?

In some corner of your mind, no matter how much money you’ve got, you probably imagined something going very wrong financially. It could be an expensive emergency like a major health problem, an uninsured loss or a market crash that makes 2000-2002 look like a minor blip. You’ve realized your greatest fear: your money dies before you do! While you may never experience a major financial interruption, understand that the market gains are presumed, not guaranteed. History tells us that gains don’t always arrive on schedule, and there can be long periods of declining prices.

Be aware that you have left Accumulation Land and will now be residing in Distribution Land. The tools, techniques and investment solutions required in Distribution Land may be very different than those that you used or even considered in Accumulation Land. In fact, continuing to use those old strategies may actually accelerate your demise. During the withdrawal years, there is less room for error than in the accumulation years when you can scrimp to save more, postpone retirement a few more years or wait for the market to recover. If you retired in 1968, you would have unknowingly entered a 14-year period when the market did not gain the presumed 10% yearly but, point to point, gained nothing. This stagnant 14-year period represents about 50% of your retirement.

If your retirement plan uses the customary assumption of an 8% to 10% annual investment gain over the long-term, make sure you have enough time for the long-term. In fact, simply assuming ANY linear rate of return may spell disaster, because the market doesn’t rise and fall in a linear fashion. Let’s say that you assumed a 10% rate of return on your investments along with a 6% withdrawal rate. You unfortunately retired at the beginning of the last Bear Market and lost about 43% of your portfolio in 3 years. In addition to that you withdrew 18% for income over those three years.Guess what? You aren’t recovering! Constant withdrawals mean that if the returns you’ve assumed do not arrive on schedule, your greatest fear could become a reality.

So what’s the answer? Your intuition tells you to “go it alone”, but logic points in another direction: getting professional help. Help to space your investment maturities so your money is working hard but available when needed for retirement – including sufficient liquidity for emergencies. Help to avoid investment risk that can lead to devastating results. Help to advise you about the pros and cons of the numerous new options that have become available in response to a growing retirement population: lifecycle mutual funds, fixed annuities with guaranteed lifetime income benefits, when to start Social Security and how to integrate the benefits with your retirement money to save taxes, using the Roth or stretch IRA, and how to insulate your earnings from income taxes until the money is withdrawn for use. Therefore your new adviser in Distribution Land may need to be completely different than the one that you used in Accumulation Land.You can’t start planning too early, and it’s never too late to reassess your retirement investments.

To learn about how you can obtain additional information on our own unique WealthCare Process, visit our website at www.familywealth.info or call 1-877-507-9770.