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How The Rich Play The Market- New WSJ Article

feature-box-goldA new article in the Wall Street Journal caught my eye.  “How The Rich Play The Market” is a fresh reminder that human nature is just that- human.

The ‘Rich’ don’t necessarily have any secrets, better will, stronger nerve, or more skills.  In fact, even the ‘Super Rich’ suffer from the same impulses and trading habits as everyone else.  They may simply have more resources and be able to recover faster.

These households, with an average net worth of roughly $90 million, invest intelligently, for the most part, spreading their bets widely, seldom trading and keeping their investing taxes to a minimum.

But the superrich also commit rookie mistakes. Their approach to diversification might not always be ideal. They chase investment fads like people chasing Audi A3 deals. They freeze with fear just when bravery is most likely to be rewarded. Maybe the “smart money” isn’t so different from the middle-class “dumb money” that Wall Street likes to mock.

The last paragraph of the article, which appears Here, really says it all.

You’re better off doing what Wall Street can’t: cultivating patience, trading as seldom as possible, focusing only on those rare companies where you might know something everyone else doesn’t and, finally, rebalancing when it is hardest.

Right now, that might mean trimming stocks a bit just as other people are most tempted to add to them.

So how best to lock in gains? Consider annuities.  A Fixed Index Annuity offers some attractive options, chief among them a guaranteed floor that protects you from losses.

Other options which move more to the Hybrid Annuity category, include

  • Return of premium
  • Partial liquidity ( i.e. 10% free withdrawals, nursing home and terminal illness waivers, income)
  • Lifetime Income annuitization options
  • Additional cost of living increases, LTC type enhancements and death benefit enhancements with NO UNDERWRITING… if need be.

Index Annuities are an excellent way to lock in gains, protect from losses, yet still participate in some of the market upside.  If you’ve had a good strong run, re-balancing out of riskier positions just makes sense.

Consider Long-Term Care Insurance

Perhaps one of the best ways to protect and conserve wealth in retirement is to purchase a quality long-term care insurance policy. My intention here is not to spout a litany of statistics right now but suffice it to say that research has shown that a large percentage of retirees will need some form of care assistance in the future. And with costs already high, that will have a significant impact on your lifestyle if and when that day comes.

In this weekend article from the Wall Street Journal, you’ll see an overview of what’s available in the current long-term care market. Traditional LTC policies are the most common but now care features have been added to life insurance and annuity contracts as well. Although many insurance companies are exiting this unpredictable market the wide range of available options can make the search for a suitable solution fairly difficult.

Now at Annuity Straight Talk we don’t sell long-term care insurance but we do understand how best to choose what’s right for you. Given the fact that we have an intention to help people with all facets of personal finance in retirement, we have in place a network of fantastic advisors we’d be happy to refer you to. With this available you’ll get the same opportunity to search the entire market for long-term care that you get with us when trying to find the best retirement income options with annuities.

I highly suggest reading the article referenced above and then contact us if you’d like a little assistance without sales pressure. In time we’ll likely add some useful information on understanding and selecting a reasonable amount of long-term care coverage. Until that happens feel free to give us a call or send an email with specific questions or comments about your situation.

As with anything, we stand ready to assist so don’t pass up the opportunity for a little free education and advice.

Have a great week!

Bryan J. Anderson
800.438.5121
[email protected]

Re-Sale of Pension Income- Wall Street Journal

A recent article in the Wall Street Journal revealed another secondary marketplace- that of secondary pension re-sales.

This is a relatively new but growing industry that seems to be skating a fine line of laws.  It's our understanding that ERISA- the laws that govern pensions- prohibit this sort of transaction.  We're not experienced in this marketplace and of course would recommend any reader to proceed with caution.  Please let us know your experience and we welcome any comments or discussion below.

A U.S. Senate committee is considering tackling a burgeoning and controversial business in which veterans and other retirees sell some of their future pension income to investors, with an array of middlemen profiting from the transactions.

"The sale of pensions to investors in secondary markets is a worrisome new practice that deserves careful scrutiny," said Sen. Tom Harkin, chairman of the Health, Education, Labor and Pensions Committee. "In tough economic times, hard-working people are often forced to make difficult choices between immediate economic needs and their future retirement security.

"However, it is critically important that people forced to make these tough decisions have the information they need to make wise choices, and don't fall victim to unscrupulous or illegal practices."

Mr. Harkin, a Democrat from Iowa, said he plans "to take a closer look at these issues in the coming months to ensure that our laws are respected and pension participants are not abused." A committee spokeswoman said it is early in the process, and the senator declined to elaborate on possible courses of action.

As The Wall Street Journal detailed in a story earlier this month, financial middlemen have helped to set up websites with names such as BuyYourPension.com and pension4cash.com to connect pension recipients.

The pensioners need immediate cash; the investors are lured by promises of higher returns.

The market plays off several current trends: With tougher credit standards, many people who ordinarily might borrow from credit cards are willing to pledge future pension checks for cash now, even if the terms are highly unfavorable to them.

Many people who never previously considered unconventional investments are attracted to them with bonds paying ultralow yields and stock markets a highly risky bet.

The financial middlemen bundle information obtained by the websites into spreadsheets that are supplied to financial advisers for their clients. The investor pays an agreed-upon lump sum to the retiree, who signs a contract pledging to hand over all or part of each month's check for a set number of years. The deals typically are priced to yield investors 6% to 7% or so a year, as their money is returned over a period of several years to 10 years.

Meanwhile, an array of middlemen collect fees: They are spread among the website operators, firms that do the heavy lifting of pulling together transactions, distributors and the financial advisers who land individual investors.

No one keeps track of how many pensions are traded for instance cash, and the number for now is believed to be small. But in recent months, websites have proliferated, and middlemen far from Wall Street have ramped up efforts to win over financial advisers to the concept.

These firms have their eye on the hundreds of thousands of military veterans, police officers and firefighters who can start receiving pension checks while they are still in their 40s, many of whom have moved on to other jobs and wouldn't be put in desperate financial straits if they pledge some of their future pension income for a wad of cash.

The deals attempt to thread the needle of federal pension law and federal statutes governing military pay, which prohibit the "assignment" of qualified pensions. The transactions attempt to make the distinction that the pension itself isn't being assigned but that the retiree is promising to fulfill a contract and will use money he or she has received from a pension check.

But that makes the transactions risky to investors because the retiree could breach the contract or file for bankruptcy, putting investors in a line of creditors seeking to be repaid.

Pension-income-stream transactions arranged by a California firm that has been in the business since the 1990s have been enforced by some courts but rejected by others, including a U.S. bankruptcy court, filings show.

Source: WSJ

Funding The Post Pension Retirement- Wall Street Journal

The weekend Wall Street Journal brought us another piece that underscores the need for stable lifetime income in retirement.   Fewer and fewer people retire with employer pensions, yet we all must plan for retirement that may stretch into our 90's or longer.  The article says:

Far more people will retire without pensions and will need to rely on their accumulated savings to pay for everything that Social Security doesn’t cover.

So how will you turn those funds into the monthly income you will need to pay your bills? The answer is murky at best.

Previous generations built "ladders" of bonds with staggered maturities and invested in dividend-paying stocks, expecting to live solely on the returns. But low interest rates and a volatile market have made those strategies difficult

The article continues with good pointers and explores the pitfalls inherent in relying on any one strategy alone.  It should sound familiar to regular readers of Annuity Straight Talk.  Our pages on building your own Private Pension explore the  topic thoroughly.

The Lifetime Income Answer:

It doesn’t take extensive analysis by The Wall Street Journal to get to a Main Street common sense conclusion: In retirement, individuals need to convert their assets into income, and need it to last a lifetime.  And in to be in harmony with their risk tolerance, they should find as strong a guarantee as possible to absolutely, positively ensure that they can never run out of income.  That is a secure retirement. 

Turn that statement around for a second- if you are comfortable facing the chance of losing a significant portion of your assets in a stock market downturn, and possibly being forced to radically alter your standard of living to suit your diminished means, then by all means, stay invested in the markets. 

Hopefully, this illustrates that a more prudent strategy is to lock in enough income to guarantee your base standard of living.  Take care of housing, food, and cost of living with Social Security, annuities, and/or pensions- and then leave your remainder assets invested in the markets, real estate, or other endeavors.  That way, when the next market crash comes, you will have insulated yourself from the most dire consequences.

The Journal closes with this advice as well:

Ultimately, we may have to become as alert to retirement asset-allocation and withdrawal strategies as we have become at investing and accumulating. Depending on how much you save and how much you want to spend, you may find you want a mix of products and services.

A mix of products and services is definitely appropriate, and will vary for everyone.  No one size fits all.   Annuity Straight Talk stands ready to assist you in devising a lifetime income strategy suitable for your needs.  Give us a call at 800-438-5121.

 

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Don’t Join The Ostrich Generation: Wall Street Journal

Yet another superb article for Annuity Straight Talk readers on retirement planning.  Some of the highlights:

50% of people age 45 and up have not calculated their savings needs

25% of people now 65 will live to age 96

62% of married couples disagree on when to retire.

These and other statistics in the article underscore the need to take control of your own destiny, plan for retirement properly, and take action on those to ensure that your goals become reality. 

The home is the first place to start- agreeing on goals, retirement location, and retirement financial needs is hard but essential groundwork.   We stand ready to assist with the financial side of the equation, but I'm afraid we can't help much with the personal issues 🙂

The article is here, and quoted below.

Stocks are volatile, the economy is stagnant, and corporate pensions and Social Security seem less viable by the day. One might expect such a dismal confluence of events to jolt aspiring retirees into financial-planning overdrive, furiously making budgets, cutting spending and salting away every spare nickel.

Yet many Americans are responding to the market and economic malaise by putting their heads in the proverbial sand. Half of U.S. workers who are at least 45 years old haven't even tried to calculate how much they will need to save to live comfortably in retirement, according to a March study by the Employee Benefit Research Institute.

Others are shelving retirement dreams because they are paralyzed by fear. According to EBRI, 20% of employees say they intend to retire later than they had planned, for reasons ranging from the slowing economy to worries over the future of Social Security.

Even wealthier people are nervous. Two-thirds of "affluent investors" with at least $250,000 in investable assets surveyed in June were concerned that their retirement stash won't last throughout their lifetimes, up from 57% in December, according to Bank of America Merrill Lynch.

"People are frozen because they don't know which way to go," says Jeannette Bajalia, president of Petros Estate & Retirement Planning in St. Augustine, Fla. "Anytime there's ambiguity, it immobilizes them."

The good news is that there are ways to fix derailed retirement plans. Among the essential tasks: talking honestly with your spouse, planning realistically for health-care expenses and rethinking your retirement age and Social Security assumptions.

The first step is looking beyond the current market realities of volatile stocks, low-yielding bonds and slow economic growth—and having the fortitude to continue taking measured risks.

Many investors are too rattled to invest in anything except cash these days. "There's a level of conservatism in couples in their 50s and 60s unlike anything I've seen," says Greg Sarian, a certified financial planner at Merrill Lynch for 19 years in Wayne, Pa. "Even if they already had a defensive investment posture, there's been more pullback."

Yet giving up potential growth on money meant to last the rest of your life can be risky as well. Say a couple with $2 million in savings, panicked over increasing market volatility, moves a portfolio of stocks, bonds and cash investments entirely to certificates of deposit and short-term Treasurys earning 0.5% a year and never shifts it back. Assuming they withdraw $120,000 in their first year of retirement and 3% more each year thereafter, they could run dry in about 14 years, says Michael Martin, president and chief investment officer of Financial Advantage in Columbia, Md.

For clients approaching retirement, Mr. Martin's firm puts 28% into equities, including 22% in individual stocks and 6% in three emerging-market mutual funds. A larger portion—36%—goes into six bond funds with a combined duration of less than three years and a 4% yield. Another 16% is in cash reserves, 13% in "hard assets" (10.5% in gold and 2.5% in timberland) and 7% in a tactical fund that jumps into asset classes as conditions warrant ( Pimco All Asset All Authority Fund).

This conservative allocation appeals to retirees who make portfolio withdrawals for living expenses, because their investments have some growth potential, but it also spreads risk enough to make it more likely that their nest eggs can last, Mr. Martin says.

So far this year, the portfolio has brought a 3% return, he says, compared with the average money-market and savings account return of 0.15%, according to Bankrate.com.

Saving strategies are only the beginning, however. Advisers say people should start thinking about other important matters, from where to live to Social Security expectations, in their 40s, if not sooner. Here's a guide.
 

• Start talking with your husband or wife—now.

Couples are having trouble connecting on retirement-planning issues. A May study by mutual fund giant Fidelity Investments found that 62% of couples approaching retirement disagreed about their expected retirement ages, and 47% disagreed on whether they will continue to work in retirement.

Scott Anderson took a buyout late last year at age 51 from his job as precinct deputy inspector of the Nassau County, N.Y., police force. He spent much of last winter helping his twins apply to colleges, he says, and working out an income plan with Craig Ferrantino, a financial adviser in Melville, N.Y.

"One person in the couple usually handles it," Mr. Ferrantino says, "but we have a holistic approach, and we like to talk to both people in the couple." By doing so, Mr. Ferrantino often finds that partners have different ideas about how much income they need, and how large an investment loss they could tolerate, among other potential conflicts.

Mr. Anderson's wife, who has a part-time job at a boutique, plans to work another 10 years—and isn't sold on his idea of moving to Utah for its world-class skiing. "If I'm going to move from my primary residence of the last 20-plus years, I see it coming sooner rather than later," he says.

The idea is bringing up issues, he says, because Ms. Anderson's mother lives near them on Long Island. As a way to compromise, he is starting to think about buying a beach house there.

Couples also can try taking a quiz together to see how they match up on basic expectations. Fidelity offers one at fidelity.com/couplesquiz that focuses mainly on finances, and there are others more focused on time at dontretirerewire.com/couples_quiz.html and zestnow.com (click on "Relationships").

A rule of thumb: Vow to spend at least half the time talking about your retirement plans together as you do about summer vacation plans, says Mr. Sarian of Merrill Lynch.

• If working till you drop is your plan, think again.

Half of baby boomers expect to be in their 70s before they fully retire, according to research released last year by First Command Financial Planning. But people laid off in their late 50s and early 60s, often because of their relatively large paychecks and benefit packages, have a hard time getting back to those levels.

"Anyone who is 55-plus working in corporate America has a bull's eye on their back," says Kevin Reardon, a fee-only financial adviser in Pewaukee, Wis. "We tell everyone who's not the owner of a business to prepare."

The unemployment rate for 55-plus workers was 6.6% in August—lower than the 9.1% rate for the total labor force. But since the start of the recession, both the number of unemployed and the unemployment rate have increased by a greater percentage for the over-55 age group, according to an AARP analysis. What's more, the average duration of unemployment for older job-seekers is a solid year, compared with 37 weeks for younger workers, the group says.

Of course, an economic rebound could change these trends. But few economists are predicting robust job creation in the next few years.

One potential salve is part-time work. Even a modest paycheck could help early retirees give their battered investments a chance to bounce back before they start tapping them.

Mr. Reardon, the Wisconsin planner, counseled one couple recently to have the wife hold on to her job three to four years longer than planned. She works part-time running a travel agency, making about $25,000 a year. She didn't view it as a large contribution to the couple's finances, so she considered quitting so they could move.

Mr. Reardon explained that if she kept working, their investments should last at least two additional years—until she's 84, rather than 82. She has continued—and can do most of the work in six months each year, he says.
 

• Plan for rising health-care costs—especially if you're healthy now.

Most boomers realize that care is pricey, but typically don't grasp the scale of rising costs.

A private room in a nursing home, which now costs $82,125 a year on average, according to the American Association for Long-Term Care Insurance, could escalate to $190,000 a year by 2030, according to estimates by insurer Sun Life Financial. Yet in a survey of 1,015 people who are 50 or older that Sun Life released earlier this month, the median guess was that costs would go up half that much.

Some 70% of Americans older than age 65 will need long-term care, meaning help with daily activities such as eating and bathing, according to the U.S. Department of Health and Human Services. Yet the same survey found that almost no one had discussed long-term care with a financial adviser or lawyer.

Financial planners who confront their older clients with such statistics say the clients usually spring for long-term-care insurance, which costs about $2,350 a year for a 55-year-old couple (including discounts for good health and being married), or $4,660 a year for a 65-year-old couple, according to the American Association for Long-Term Care Insurance.

The main moving parts are the length of the benefit, which generally should last at least three years; the daily benefit amount, which should match up to costs where you live; and the "elimination period," meaning the period of time you choose to pay your expenses yourself before coverage starts. Particularly for people under age 70, many planners also recommend paying up for a rider that provides a 5% bump in the benefit each year to protect against inflation.

Another option is a "hybrid"—an annuity or life-insurance policy with a long-term-care benefit. Ms. Bajalia in St. Augustine recently set up an indexed annuity for Barbara Deckman, a 62-year-old retired teacher, which has a lifetime-income benefit and a "double confinement" rider, meaning the policy pays twice as much each year if Ms. Deckman qualifies for long-term-care payments.
 

• Don't jump the gun on Social Security.

One of the benefits of advance planning is that it can allow you to delay taking Social Security for as long as possible. Depending on your financial situation, life expectancy and other issues, that could be a wise move.

Unless a person is terminally ill, there is little upside for someone in their early 60s to tap Social Security. By collecting at 62, rather than at the government's "full retirement age" of 66 for people born from 1943 to 1954, you would slash your monthly benefit. Wait until age 70, however, and you would get 132% of the monthly benefit you would collect at your full retirement age.

A retiree eligible for $18,750 a year in Social Security at age 62 who waits to collect $33,000 a year starting at age 70 could substantially increase the after-tax amount he could spend by age 95, according to T. Rowe Price. Assuming the benefit would increase 3% a year for inflation, and that the retiree was in the 25% marginal income-tax bracket, he would get $850,000 in all by starting the benefit at age 62—or $1.4 million by waiting until age 70.

Becoming a nonagenarian isn't unthinkable: One in four of today's 65-year-olds will live to 90, and one in 10 to age 95. So, if your family members typically live into their 80s or 90s, and you think you could, too, you should consider delaying the benefit as long as you can.

Of course, the big challenge in postponing Social Security is figuring out how to fill the gap between age 62 and whenever you start collecting benefits. Couples in which both spouses worked could try to live off the early benefit of the worker with the smaller paycheck, saving the larger one for later.

Another strategy, living off retirement-account withdrawals for a few years, might help cut future tax bills. Starting in their 70s, retirees generally have to take mandatory withdrawals from retirement accounts, and pretax contributions and earnings are subject to income tax. By lowering those account balances in their 60s, at the same time they aren't drawing Social Security income, they might be able to take smaller mandatory withdrawals later and also pay tax on those withdrawals at a lower rate.

Bottom line, Mr. Reardon says: "If there's a good chance one of you will live into your 80s, delaying Social Security is a good way to guarantee your rate of return for your collective lives."

If you wait until age 70 to begin collecting Social Security benefits, you will get 132% of the monthly benefit you would have collected at your full retirement age. An earlier version of this article said you would get 132% of the monthly benefit you would have collected at age 62.
 

Boomers Find 401(k) Plans Come Up Short- WSJ

Here is an eye-opening article that came from the Wall Street Journal recently that addresses the inadequate funding of 401(K) plans. It explains that average balances for people ages 60-62 is about $149,400. That leaves quite a gap for the average person working to accumulate sufficient retirement savings. Read the article here.
Defined contribution plans (401k, IRA etc.) came about as defined benefit plans (pensions) were abandoned by most major corporations. As you know, that shifted the liability of retirement income from a company to an individual. Now that the first consumers of defined contribution plans are hitting retirement age, the likelihood that 401(k)s will provide meaningful income is frighteningly low.
 
This leaves a lot of people with some difficult decisions to make. The article suggests that many will be forced to take greater investment risk for greater potential returns or simply work until retirement is affordable. That doesn’t paint a very desirable picture especially at a time when risks should be reduced and millions of people were planning to leave the workforce.
 
What situation do you face? The advent of defined contribution plans gave the majority of people full accountability for retirement security. Regardless of where you find yourself, the choice and responsibility is yours to make the most of retirement assets.
 
First of all, take a look at what you have and find all options for maximizing those assets for retirement income. Eliminate risks where possible and guarantee what’s most important. Once a base level of income or assets is insured you’ll find more freedom and security with assets targeted for more aggressive growth strategies.
 
For ideas on how to achieve your goals feel free to call, email or make an appointment today. AST stands ready to assist. 
 
Bryan J. Anderson

800.438.5121 [email protected]

Changes In the Long Term Financial Landscape

These days it seems there is almost too much to think about when trying to manage assets for the long run.  Let's forget about the traditional problems retirees deal with for a minute.

Whether we like it or not, the financial landscape has and will continue to change dramatically.  The source of my thoughts here is an article written by Michael Casey Jr. in the Wall Street Journal.  In the article he talks about the changes in expectations and investment strategies that will be in order for generation Y to accumulate wealth.

Now, there's more here than just and article you should pass along to your children and grandchildren.  You should most definitely do that.  But isn't it also relevant for anyone challenged with the task of appropriately managing personal assets for 20 or 30 years… or possibly longer?

Indeed it is.  I encourage you to read the article here.

Mr. Casey gives three major points of consideration that show the cards are stacked against the average investor playing the U.S. equities markets.

1.) Equity trading and investing is increasingly an algorithmic game where traditional investment strategists are now in the minority.

2.) As baby boomers transition to more fixed investments and guaranteed products, the demand for domestic equities will decrease.

3.) The U.S. is no longer in a dominant position of being able to dictate a wide variety of global economic terms.

These and many other related global factors show us that no matter what happens we will have to get used to dramatic changes in how assets will be managed for maximum profit.  That includes you, me and everyone we know.

Is there a chance that policy makers will make the U.S. competitive again?  Let's hope so, but we already know not to count on that.  So, now is the time to do all you can to make assurances where possible.

Please read Mr. Casey's article and feel free to send a comment my way if you'd like to share a thought or two.

As always, I can be reached by phone or email.  Have a great week!

Bryan J. Anderson

800.438.5121 [email protected]

Brett Arends: Don’t Get Carried Away By the Market Rally

Here’s a good article from the Wall Street Journal weekend edition that should help remind investors to keep a close eye on portfolios and planning strategies in the midst of a strong market rally.  Read the article here.

Brett Arends gives readers seven reasons to be cautiously optimistic with retirement accounts this year.

Based on what I hear from most people, it must feel great to see investment accounts adding a little much needed weight.  It is especially important, however, to not forget past market corrections and do everything possible to avoid such a costly oversight if things cool off a bit.

Constant research and due diligence is key to successful investing.  As mentioned, the article references seven points of concern.  It will pay dividends to branch out from this article and explore the basis for each claim by looking into the work of the analysts and/or commentators cited.

I will definitely do my part and continue researching as many angles as possible.  If anything useful comes from that, I’ll pass it along to members of this site.

Take care and have a great week!

Will This Rally Last?

Happy New Year everyone!  It looks as though it’s time to get back to work after the holidays so I’m going to tackle a subject that seems to be creating some debate recently.

The stock market has been on an impressive run over the past couple of years causing many people to shed the apprehensions that followed a disastrous 2008.

Which side of the fence are you on?  Is this rally the real deal.  Since most investors are cheering the market’s run I want to remind people not to get too excited.  Brett Arends of the WSJ talks about this “Santa Rally” at length in a recent column.  Read Brett’s article here…

The article presents several good reasons why it may be a good idea to take some chips off the table and protect your gains.  It’s the difference between a big mistake and a little mistake.  Do you want to continue to carry high risk or protect your assets?  The market is at it’s highest level in two years and although economic conditions seem to be improving, we still have several lingering problems that can end the party in a hurry.

Whatever happens is entirely your choice and the big disclaimer here is that I’ve always been conservative with investments.

Call or email anytime for a honest discussion of how safe investment vehicles, such as annuities, hold pace with other assets through all the up and down years.  Do you want to worry about your money disappearing or not?

Best Wishes For a Prosperous 2011!!!

Bryan J. Anderson

800.438.5121 [email protected]

No Time Like Now To Talk Taxes

How about we take slight break from Annuities this week and get down to something that affects every aspect of our financial lives.

From the Wall Street Journal comes this article titled “Smart Year-End Tax Moves.”

Since big changes to tax law are on the horizon, it may be a good idea to make sure you have time to act in case the changes could adversely affect your personal situation.

Yes, the debate on the extension of the Bush-Era tax cuts is at the center of this coming storm but everyone needs to understand that failure to stop the expiration will impact more than just the top income earners.

All income tax rates will rise without an extension and most concerning of all, the dividend tax rate will increase from 15% to 20%.  Now I’m certain that will have an effect on anyone currently saving for retirement.

Take a look at this worthwhile article and be sure you have time to make changes if needed.  As always, call or email with questions or comments and have a great week!

Bryan J. Anderson

800.438.5121 [email protected]

Retirement Asset Deficiency

It’s a frightening reality that many people don’t have the necessary assets for a comfortable retirement.  Maintaining a certain lifestyle not to mention being able to cover future medical costs is a serious concern for many people.

Brett Arends of the Wall Street Journal wrote last week of the widespread funding concerns of retirement plans in various categories.  You may be surpried we’re not just talking about individual private account but major pension plans as well… what is not so surprising is that social security is facing the same challenges.

What is all boils down to is this:  no matter what your plan is for retirement income is, you’d better have a backup plan and some solid guarantees to go with it.

The article I’m referring to is titled “Warning:  Retirement Disaster Ahead.”  Follow the link to read more.  The intention is not to sound an alarm but raise awareness so that you can take precautionary measures to ensure a good safety net is in place for your retirement income plan.

My goal with this weekly email is to bring you consistent articles that are relevant to issues all current and future retirees face.  No emails go out unless it’s an article worth reading.

I recommend reading Brett’s article and reviewing this site to see if an annuity can help remove doubt in any area of your plan.

As always, I am available with any commens or questions and would invite all members to share information that might help the research efforts of other people.  I’d be happy to post any relevant articles from members of this site.

Have a great week and thanks for your continued support of Annuity Straight Talk.

Bryan J. Anderson

800.4385121

[email protected]

Thinking Smarter About Risk- Moshe Milevsky on Annuities

This article written by Dr. Moshe A. Milevsky in Monday’s Wall Street Journal is one all members and visitors of AnnuityStraightTalk should read.  It deals with the management of risk according to a set of factors rarely considered in financial planning circles.

The article discusses the difference between personal and financial capital.  Your personal capital reflects your future earning power while financial capital is comprised of the assets you have accumulated over your career.

Younger workers hold most assets in the form of personal capital while pre-retirees tend to have more financial capital.  Both forms have associated risks and proper financial planning can not be done without considering the two in conjunction.

If your personal income is negatively affected by downturns in the market then financial assets should be conservatively invested.  The closer a person comes to retirement, the more closely those assets should be guarded because personal capital decreases with the number of working years remaining.

If your financial capital needs protection, how do you plan to do it?  When considering safe investment vehicles, do annuities fit into your retirement picture?  Browse my site for information on how annuities can help protect your financial capital.

I highly recommend reading Dr. Milevsky’s article.

Find the article here.

Annuities and the Global Economy

Christopher Wood of the Wall Street Journal gives a great assessment of the current global economy in an editorial today.  Now I know it’s an opinion piece but show me one economic analysis that isn’t.

The article talks about the chances for a double dip recession and how different markets and economies around the world could be affected by both inflation and deflation.

How do annuities fit in?  That’s easy.  Annuities are safe and have continued to grow and protect wealth througout the current recession and every one before now.

If you are concerned about protecting a portion of the assets you have from extended difficulties in financial markets, use this site to learn about how annuities can fit into your plan.

Beware of sales tactics used to push unsuitable products and feel free to call me for a no-pressure discussion of your situation.

Wood’s article can be found here.