Hanging out with "Mattress Mack" Jim McIngvale after hearing his very inspirational talk at this morning's Prayer Breakfast at St. Pius X High School - Prayer Breakfast sponsored by Catholic Radio KSHJ - AM 1430...
Answer: When that 50% gain is actually "locked in" and it can never be lost when the stock market crashes or declines.
Check out the spreadsheets below - they're comparing how the performance of a hypothetical fund based solely on the annual returns of the S&P 500 Index (the columns with the blue heading) compared to the performance of a Fixed Index Annuity over the recent 20 year period of 01/01/1999 - 12/31/2018.
The first spreadsheet compares the performance of the stock fund and the annuity without any withdrawals, and the 2nd spreadsheet compares their performance while withdrawing the classic 4% per year.
In both spreadsheets, although the stock fund received 100% of the gains of the S&P 500 each year the index went higher, it also received 100% of the losses during those years when the stock market declined or crashed (note the yellow highlighted cells).
As you can see, in both spreadsheets the annuity received 50% of the gains of the market each year, but received 0.0% of the losses.
Fixed Index Annuities (FIAs) automatically "lock in" gains when the stock market moves higher, and then never lose any money when the stock market declines, so even with only "50% of the gains," the FIA ends up with 28% more money after 20 years than the stock market fund...
The spreadsheet below is identical to the one above, except that it shows the effect of withdrawing 4% of the account's value every year.
As you can see, the cumulative withdrawals were 33% greater for the Fixed Index Annuity ($253,437 vs $190,354) and the final Year End balance for the Fixed Index Annuity was 31.6% greater than the Year End balance for the Index Fund ($349,680 vs $265,719).
You and I both know that looking back into history doesn't predict the future.
My point in presenting these spreadsheets is simple - I just want to make sure you know that you actually do have a choice between a couple of plans:
Plan "A" is to keep your retirement savings fully vested in the stock market, where absolutely nothing is guaranteed - yes, your retirement account will get 100% of the upside, and it will also continue to get 100% of the downside. And, if you live long enough and the stock market doesn't behave itself, there's a very real possibility you could run out of money.
Plan "B" would be to ponder and consider what an annuity could do for you - a financial product that's been around since Roman times, and may actually have some value for you to consider because of what it brings to the table - guarantees of no losses in the stock market and a guarantee that you and your spouse can receive a "paycheck for life" if that's what you want. Then, down the road, when you and your spouse pass on, the money in your account will go to your heirs outside of probate...
I forgot to mention one thing... some of you may be saying "yeah, Rick, this is all fine and dandy, but what about all the fees, huh??"
I'm so glad you asked - the two spreadsheets I've shown above illustrate a real, actual Fixed Index Annuity that's one of the top FIAs across America - it does indeed have a 50% participation rate, and the annual fees for it are exactly $0.00 per year.
.Last thing (I promise) - I've put together a "whiteboard video" that talks about the benefits of a "Plan B" retirement plan - you can check it out here: www.PlanBPlan.com
You and I may not know what the next 20 years will bring in the financial world, but you and I know, with 100% certainty, that "50% of the "up" and 0% of the "down" with an FIA will beat "100% of the "up" and 100% of the "down" every time.
Give me a call, send me a text or reply to this email if you have questions about any of this...
Remember the song “Time Is On My Side,” made popular by The Rolling Stones in the 1960s?
(Admit it - just now, when you read the song title in the sentence above, the dulcet tones of Mick Jagger’s voice just started playing in your head, and they'll be there all day - lol).
Well, it’s been 56 years since that song was released, and I’m afraid I’ve got some bad news for my fellow Baby Boomers.
With apologies to the Rolling Stones and the song’s composer, Jerry Ragovoy, I’d like to suggest a new title and lyric that’s more appropriate for us Baby Boomers:
“Time Is NOT On Our Side (But We Continue To Act Like It Is)”
Since 2011, Baby Boomers have been retiring at the rate of 10,000 people per day. Many of my fellow Baby Boomers are not quite as carefree and “cavalier” as they were in the bygone decades – perhaps you’re one of them.
Over the years, they’ve seen their 401(k) accounts go up and down like a yo-yo, through several “bull” and “bear” markets. But now that they’re older, they’re realizing that, indeed, time is NOT on their side any more. Their risk tolerance has gone to zero, and they just want to "keep the money they have."
The thought of losing money again, like they did during the various “bear” markets over the years, is not exactly what they're wanting, now that they're retired.
They realize they DON'T have the time to wait for the stock market to recover – they’re 65, 70, 75 years old and they know they truly cannot afford to take another “hit” to their retirement accounts like they did when they were younger…
And, if that’s not enough, most Baby Boomers don’t have pensions from their former employers, so right now their only source of a guaranteed monthly paycheck is their Social Security income.
However, there is a specific financial instrument that solves, once and for all, the problems Baby Boomers are facing of a) losing money, and b) outliving their money - it's called a Fixed Index Annuity.
Here's a short "Annuity Primer" video to give you a "40,000 ft." overview of annuities - it specifically addresses the two problems mentioned above:
Here’s a link with information specifically about a Fixed Index Annuity:
With the “stroke of your pen,” you can literally “insure and guarantee” the money in your retirement account – you can “insure and guarantee” some of it or all of it – it’s up to you. And, the cost to get your money "insured & guaranteed" is a big, fat $0…
It really is “just that easy” to protect your life savings and “turn the retirement account you have into a retirement account you want.”
Watch the videos and either call me or reply to this email with your questions...
Here's the link you've been waiting for - click the link below to go back in time and watch the Stones perform "Time Is On My Side."
Before you become even more "chronologically disadvantaged," give me a call - I'll be happy to answer your questions...
(844) 370-SAFE (7233) toll-free
(713) 206-3885 direct
Check out the chart below - it's a chart that compares the annual performance of the S&P 500 with a Fixed Index Annuity for the years 1998 - 2018. The Annuity credited 50% of the annual gains of the S&P 500 during those years...
Question 1 - When is getting 50% of the S&P 500 gains better than getting 100% of the S&P 500 gains?
Answer 1 - When you can automatically "lock in" and keep those gains and never lose them when the stock market goes back down.
Question 2 - What years are the "best" years on the chart below? (warning - trick question)
Answer 2 - The years when the annuity earned a 0% interest , During the years when the stock market declined and "gave back" previous gains, the Fixed Index Annuity simply earned 0%.
The gains the Fixed Index Annuity received in previous years are "locked in" and simply cannot be lost when the market declines...
Moral of the story - "A bird in the hand IS worth two in the bush" or "It's what you get to keep that counts."
Got questions? I've got answers - call me or reply to this email.
(713) 206-3885 - direct
(844) 370-SAFE - toll-free
Everybody wants "it" when they retire, but most people retiring today don't have "it."
Our parents had "it" when they retired - "it" was called a pension.
I've been talking about "it" for 10+ years - take a moment and check out this informative article that's all about "it":
When someone "joins the club" and starts receiving "it," that person has solved, once and for all, the #1 fear of Baby Boomers - the fear of outliving their money.
Got questions about "it?" Give me a call or just reply to this email...
The turmoil in the stock market during the past few weeks reminds me of the saying attributed to Yogi Berra: "... it's dejavu all over again."
It also reminds me of another "tongue-in-cheek" saying about the stock market:
"The stock market giveth, and the stock market taketh away."
So... here' s a question for you to ponder...
“What would your retirement be like if your money could grow when the stock market 'giveth,' but your account would never lose money when the stock market 'taketh away'?"
We all remember what happened 10 years ago, but here's something to consider - this time it IS different.
It's different because everyone's a decade older - many Baby Boomers have retired, and their risk tolerance has gone to zero, i.e. they just want to "keep the money they have."
The thought of losing money again, like they did 10 years ago, is not exactly what they're wanting, now that they're retired.
And, because many Baby Boomers don't have pensions from their former employers, they're also worried about outliving their money.
There is a specific financial instrument that solves, once and for all, the problems Baby Boomers are facing of a) losing money, and b) outliving their money - it's called a Fixed Index Annuity.
Here's a short "Annuity Primer" video to give you a "40,000 ft" overview of annuities - it specifically addresses the two problems mentioned above:
Watch the video and either call me or reply to this email with your questions...
There's no cost or charge... I'll look forward to answering your questions...
Merry Christmas to you and your family,
Do you have an IRA? What about your spouse? Do you or your spouse anticipate inheriting an IRA? Here’s a “pop quiz” of 5 questions about the laws pertaining to IRAs:
I could go on, but I think you get the idea – there’s a “right way” and a “wrong way” to set up IRAs, both as the current owner and as someone who inherits, or anticipates the inheritance of an IRA, to minimize income taxes.
You may not realize it, but your IRA beneficiary form is the single most important document in your estate plan. It trumps everything, regardless of what a will, trust, divorce decree or other documents might say.
If it’s been a year or more since you reviewed your IRA’s beneficiary form, it’s time to revisit the form now. There are 10 specific things that need to be checked on your IRA’s beneficiary form, and a beneficiary “check-up” will ensure that your beneficiary documents are up-to-date and will accomplish what you want with your IRAs and other retirement accounts.
If you’d like to schedule a complimentary “Beneficiary Form Check-up” and double-check the 10 specific things re: your IRA’s beneficiary form, please give me a call…
Tax laws continue to change, so if you’ve contributed to an IRA, a 401(k), or other qualified retirement plan, or if you’ve inherited or expect to inherit part or all of a qualified retirement plan, give me a call to schedule your complimentary "Beneficiary Form Check-up"...
Not seeking that advice could cost you or your heirs thousands of dollars!
Check out the PDF linked above - a couple of years ago, this person decided that she was tired of not earning a decent interest, and she decided to put her "Lazy Money" to work...
Now, her money is:
And, if she never needs to access that money, her heirs will inherit the entire $240,567 income tax free when she passes on...
I'd say this represents quite an improvement over letting her money continue to sit around and be "lazy" in a bank CD or savings account...
What do you think?
Here's a short "animated whiteboard" video I put together that explains everything:
Call or send an email with questions - no cost or charge - just answers...
Here are 7 questions for your consideration:
If you answered "Yes" then contact me - I'll provide a 1-page summary customized specifically for you that will answer your questions...
If you answered "No" and you're "OK with Less," contact me anyway - I'll still provide the custom summary so you can see what this is all about and you can "discover what's possible."
Seriously - what I'm attempting to do is tell you about financial solutions you may not know about - solutions where your money is NOT at risk - solutions that will help you and your family and will put you and your heirs in a better financial position.
(Notice that I use the word "solutions" and not "strategies" - a "strategy" is something we hope will work, but a "solution" is something we KNOW will solve the problem at hand.)
So take a minute, "stick your toe in the water," give me a call or send an email to "discover what's possible" and find out how you can "have more."
My parish, St. Philip the Apostle in Huffman, was "wiped out" by Hurricane Harvey - waist-high water throughout the entire church.
His Eminence Daniel Cardinal DiNardo, the Archbishop of Galveston-Houston, celebrated Mass with the St. Philip community on Sunday, September 10th, at our temporary home, The Overlook in Humble...
Many thanks to Cardinal DiNardo for lifting the spirits of the St. Philip community.