the benefits of a fixed index annuity. the benefits of a fixed index annuity what others think...
TRANSCRIPT
The Benefits of a Fixed Index Annuity
What others think about Fixed Index Annuities
How they work
Companies
Topics
We have found that there are basically three issues of importance
when a person invests money:
Tell me, in order of importance, what you think they are?
2008 Bond Returns:
High Yield Bond Funds -23.18%
Government Bond Funds -0.51%
Corporate Bond Funds -7.47%
Municipal Bond Funds -5.51%
From 5/03/2011 to 8/10/2011 the Dow dropped 16% !
Bond Values between 8/31/10 and 12/15/10...
iShares Barclays 20+ Year Treasury (TLT) -15.1% Vanguard Extended Duration Treasury ETF (EDV): - 23.4 %
Market Instability Continues to be the Norm -
Just imagine: Investors lost nearly a quarter of their money in less than four months in what many believe to be the world's safest investment —
U.S. Treasury Bonds.
QUESTION: Do Bonds or Bond Funds have the
potential to increase in value, in today’s interest rate environment?
* Money and Markets Archive Dec 23rd 2010
Today’s Bond Market
The market has averaged a downturn once every four years! In the past 56 years (1954 – 2012) it has had 14 down cycles.
From 2000 to 2013 the S&P has had NO GROWTH!
Look at the number of down years since 2000.
Trying to grow your money in the Market without a Safety Net is Risky.
We have seen 40% downturns so how long will it take to
recover from a 50% loss if it comes?
Keep in mind, you will need 100%in gains to recover from a 50% loss!
200,000 -40%
32,400
-80,000
-12,000
-12,000108,000
1st year Income
+30%
2nd year Income 128,400
-38,520
31,152
3rd year Income -12,000-30%
77,880
+40%4th year Income -12,000
97,032
Let’s Talk About Distribution
Example of how an up and down market with income withdrawals can effect the growth or recovery on your retirement account where a FIA is NOT used .
This hypothetical non FIA account is
down $103,000.
How much of that did you get to spend?
You only took out 48,000 in 4 years but the
account is down a lot more than 48,000.
Choosing the right Retirement Vehiclefor retirement can be difficult. . .
- No Risk - On one hand, you want the safety and guarantee of principal and past earnings.
In the past, Retirement Savers had to make a decision on which hand to choose from…
- Has Risk -On the other hand, most people prefer the potential of higher returns by being linked to the market, a return that a fixed rate investment cannot offer.
. . .That was then, this is NOW!
Now you can have the best of both worlds!
• Guarantee of principal with a minimum interest rate guarantee.
AND
• The potential to participate in stock market-linked growth.
$136,937
02’ 08’
100K
90K
80K
110K
120K
140K
130K
98’ 99’ 00’ 01’ 03’ 04’ 05’ 06’ 07’
150K
160K
09’
$125,080
$78,869
$111,033
$145,542
$156,857
$100,770$99,228
-27%
-21%
-23%
-9%
$146,853
S & P 500 Index Credits Min. GuaranteedContract Value
10’
$160,747
$108,789
170K
11’
$171,388
$107,857
$105,000
This line represents what it would have done in the income account if it would have had a Guaranteed Lifetime Income Rider that is now available with some annuities…5% Bonus with 4% MINIMUM roll up on Income Account for income planning purposes; Some products have even higher bonus and/or roll up rates.
$174,832
Federal Reserve Chairman Ben Bernanke has a majority of his liquid wealth - between $1 million and $2 million - invested in annuities …
22,000 Fed. Reserve Employees, have 75 percent of their assets - that's $3.2 billion, invested exclusively in annuity contracts…
Federal Employees have followed Uncle Ben in choosing Annuities vs. traditionally held
investments.
Research done by - Barry Dykes June 19, 2009 Article in Medical Economics
Ben Bernanke
It was created to compete with very popular index funds, mutual funds that track a stock market index. I have to admit I like the concept –
Pg 511
If you do not want to take any risks but still want to play the stock market, a good index annuity may be right for you. Pg. 513
Suze OrmanTHE ROAD TO WEALTH
A Fixed Index Annuity allows you to take advantage of market-type growth without the potential of any market-type loss.
In contrast to a stock or mutual fund vehicle where the investor bears the market risk, the Fixed Index Annuity design insulates you from the results of a market downturn.
The Benefits of a Fixed Index Annuity
Potential of Stock Market Linked Growth
Safety, Guarantees, and Growth Potential
An Fixed Index Annuity (FIA) provides you with all of the best features of a traditional fixed annuity; Plus gains linked to a stock-market Index.
• Guarantee of Principal
• Minimum Interest Guarantee
• The Power of Tax Deferral
• Potential of Stock-Market Linked Growth
The Benefits of an Fixed Index Annuity
There are basically three things that will cause you to run out of money -
Outlive it
Spend it
Lose it
Outlive it
Spend it
Lose it
Easy to Manage
Guaranteed Minimum Returns
Share in Market Gains but not the losses
Lifetime income stream for you and your spouse
No management or basic policy fee (fee possible with Income Riders)
401k, IRA, ROTH IRA, etc.: Roll-over eligible
Tax Deferral and Social Security Taxation Benefits
Hedge against health related costs: Income and Assets
Legacy Planning: Can avoid Probate
Review