In this week’s Hidden Wealth Review, I teach that the personal finance website, GOBank.com, released an article last week stating that the biggest fear plaguing Americans is the fear of out-living their retirement money or reducing their lifestyle during retirement to avoid running out of money. Unfortunately, many headlines are now promoting the use of lifetime income retirement strategies. We have found that many people have used annuities for this purpose.
June is Annuity Awareness Month. I want to make sure that you are aware of annuities and some of their potential shortfalls. I also want to teach you that you can improve annuity performance if you currently own or you are thinking of using an annuity for retirement.
First, I want to say that there are a lot of positives about annuities. Fixed indexed annuities protect your principle. Over the years, some people have confused what we teach at The Hidden Wealth Solution with annuities. While there’s a place for annuities, I want you to understand the difference between annuities and tax-free lifetime protected income. To explain the difference, I use the acronym TAG.
Taxes. You can’t use an annuity to get around taxes unless you use a Roth Annuity. Not only do you end up leaving an inherited Required Minimum Distribution (RMD) tax to your children, if it’s a non-IRA annuity, you will leave them a large capital gains tax because non-IRA annuities do not have a step up in basis at death. In the meantime, the distributions from your annuity will be counted as income and this can cause 50% to 85% of your Social Security income to be taxed.
Access. No one wants to be locked out of their money, especially if there is a need or emergency. Many people are drawn to these accounts by a guaranteed growth rate. These guarantees only apply if you hand over all access to your money to the insurance company, in return for a fixed, monthly payment. The purchasing power of the payments, of course, is eroded over time by inflation because there is no cost of living increase. The longer you live, the less it will buy. For example, if you lock in a monthly payment of $1,000 per month and you live 20 to 30 years in retirement, what that $1,000 a month buys today will only buy $500 worth of goods in 12 to 15 years.
Growth. Annuity growth has been very stagnate. We recently reviewed an annuity where the cap was 2.5%. While the S&P index earned 19%, this person was stuck making less than just 3%. We saw another instance where the client thought the previous year’s fees in his variable annuity were in excess of 12%. When we added the fund manager’s turn over fees and the annuity’s internal fees, the total fees he paid were near 20%! This annuity had averaged a growth of only 2% over the last four years.
If you’re looking to avoid the fear of running out of money before you run out of life or you are forced to lower your lifestyle, please simply attend my Retirement Protection webinar this coming Tuesday. Inflation appears to be heading up again with the Federal Reserve raising interest rates just this past week. Inflation erodes purchasing power and causes market volatility. Neither of these things is good for those who are trying to live on their annuity’s fixed monthly income.
Join us this coming Tuesday for an introduction to a strategy that allows you to grow your money without tax, access your money without tax and has a growth performance that’s average over 8% annually! In fact, in some years, this strategy has earned double digit growth, all without tax or risk of loss!
A client recently shared that her only complaint about Chuck Oliver, financial advisor, and The Hidden Wealth Solution is that she wished she had taken the time to give the proper investigation into these proven strategies sooner. Summertime is a great time to focus and learn the best way to avoid America’s greatest fear.
To register, go to www.RetirementProtected.com, enter the required information and submit your registration. Once you’ve registered, you’ll receive an email containing a personal link to join Tuesday’s event.
There is no cost and no obligation for this webinar. I encourage you to register now because these events fill quickly. Just for registering and attending, I will gift you an e-copy of my book, The Baby Boomer Retirement Breakthrough-The Unfair Advantage to a Safe and Secure Retirement.
NOTE: This is a log-on and learn webinar, not a live workshop. You will need a laptop or PC to join. It is strongly suggested that you NOT use an iPad or hand held device for this event. Our proven retirement and financial solutions are best for; people positioning themselves for retirement or who want to navigate better to or through their retirement. People who have saved $200,000 or more for retirement. People who are wanting to determine if they are maximizing and optimizing their retirement planning. Boomers who want to pay the least amount of taxes on income, reduce or eliminate tax on their Social Security and create a sustainable, increasing, lifetime income for both spouses.
-Spouses are encouraged to attend this event together-
Or Call
(855) No Tax 2 U
(855) 668-2928
Here’s to your Hidden Wealth,
Chuck Oliver
Best-Selling Author