Dr. Jeffrey Brown, retirement expert and advisor to the White house, said in a recent Forbes article: “Income is the outcome that matters most for retirement security”.
Your stocks, bonds, mutual funds, real estate, and other investments will always go up and down with the markets.
They can’t guarantee you a predictable income stream, and there is no guarantee you won’t lose all or part of your savings if the market drops. The only way you can create certainty and peace of mind that you will have enough income in retirement and never outlive your money is by creating ‘income insurance’.
There is only one financial vehicle in existence today that will give you the following:
- 100% guarantee that you can’t lose your deposits*ˆ
- Tax deferred growth of your money
- No stock market risk whatsoever
- A contractually guaranteed income for the rest of your life*ˆ
- No annual management fees
We’re talking about annuities offered by the most highly rated insurance companies which contractually guarantee you an income for the rest of your life.*ˆ According to Wharton Professor, Dr. David Babbel, and the U.S. Treasury Department, “Americans should convert at least half of their retirement savings into an annuity.”
The New Retirement Reality:
- Unless you work for the government, you most likely don’t have a pension.¹
- People are living longer – the average life expectancy is 79 for male, and 81 for female². If you’re married, at least one spouse has a chance of reaching 97².
- The 4% withdrawal rule is no longer valid – according to 2013 Wall Street Journal article “Say Goodbye to 4% Rule” – you have a 71% chance of outliving your income if your retirement savings are tied up in a 401K or IRA plan primarily invested in stocks or bonds.
- We live in a low interest rate environment. How can you live off of the savings in your IRA or 401K plan safely when interest rates are near 0%?
- No portfolio manager, stock broker, or financial advisor can control the single most important factor that determines if your money will last. The question to ask yourself is, “What will the market be doing when you decide to retire?” If you have one bad year early on, it can derail the rest of your retirement. If you have several bad years, you will probably be back at work, and drastically reducing your lifestyle. Are you comfortable taking that risk?
²CDC, 2014
