In my 28 years in the insurance business, nothing has surprised me as much as what I see today.
Many retirees and those intending to retire soon are coming to my office without a retirement income strategy. They’ve saved and invested, and thought for sure they had their “plan.” But, as the saying goes, “The best laid plans of mice and men often go awry.”
Not too long ago, if a retiree had $1 million in bank CDs, he or she could find a 4 or 5 percent long-term rate, that plus Social Security and other investments allowed them to live comfortably.
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Today bank rates are near 1 percent, the same $1 million in a bank yields just $10,000 in income!
In response, some have shifted cash from banks and other investments, into the stock market hoping to solve their problem. Unfortunately they find that the S&P’s average dividend is now just 1.97 percent, according to The Wall Street Journal
While the stock market has roared to new heights recently, between January 2000 and January 2013, the S&P 500 only increased by a total of 4.9 percent when adjusting for dividends and splits, according to Yahoo! Finance
. Otherwise there was virtually no gain for 13 years!
If you are interested in a strategy that includes the guarantee of a “retirement paycheck” to last a lifetime, even if you live beyond 100, I suggest you consider an annuity that offers these guarantees no matter what happens at the banks or in the stock market.*
One of the most important recent advances in annuities has been the evolution of fixed indexed annuities (FIAs) to include the guaranteed lifetime withdrawal benefit (GLWB) rider. Retirees are discovering how they can guarantee a lifetime of income and have their income base credited at a rate of up to 8 percent guaranteed while it accumulates.*
In 2013 The Wall Street Journal
reported that annual sales for FIAs had reached an all-time high of $33.9 billion.
Adding a GLWB rider creates a value known as the income base; this value is made up of your premium plus interest (the rollup rate) in addition to any applicable bonus. This value is tracked separately from the regular FIA account value and is not available to take as a lump sum, it is used to calculate your income payouts.
Rollup rates are typically guaranteed for a specified number of years and can be as high as 8 percent guaranteed. Yes, 8 percent!
Many FIA purchasers today are having this rider added to their annuity contracts. However, if you have no plans to withdraw money from your annuity contract in the form of income payouts the GLWB rider may not be suitable for you, since there is an annual cost for the rider that typically ranges between 0.5 percent and 1 percent.
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At Crown Atlantic, we focus on working with retirees and pre-retirees with an emphasis on preserving assets and maximizing income.
If you would like more information, Crown Atlantic has a free report called Annuity Primer: Get Guaranteed Income for Life, which details how the annuity process works.
And, if you’re interested, Crown Atlantic is licensed in all 50 states, so we can have a representative speak with you to help you understand the FIA product and other offerings.
For the free Annuity Primer report and more information on securing your income, go today to CrownAtlantic.com/Protect
or call us toll free at 855-221-5546.
*Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurer. A fixed-indexed annuity is not a registered security or stock market investment and does not directly participate in any stock or equity investments, or index. Annuities are long-term insurance contracts designed for retirement. As a result there may be fees or penalties for early withdrawals, including surrender charges and if taken prior to age 59 1/2, may be subject to a 10% federal additional tax.
Joe Stark is the CEO of Crown Atlantic Insurance, LLC in Boca Raton, Fla. Stark is an insurance industry veteran with more than 25 years of experience. For more of his reports, Go Here Now.
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