By Wayne McLeod MFGSLifePartners.com
Now we are in 2016 – Where has your money been the last 15 years? How Low Will it GO?
Where is your money today? On the “Red Line” or “Blue Line”? If you have money on the “Red Line”, would you want to move it to the “Blue Line”? Options available for Qualified Funds and Non-Qualified Funds. Click Graph below and watch 3 minute video.
Added benefit go to my website WayneMcLeod.com and watch video 3
October Surprise 2014 – 2015
The S&P has been above 2100 for 59 day out of 260 trading days or 23% of the time. May 21 was the yearly high of 2,130.82, and yearly low was August 25 at 1,867.61 – a difference of 14.09% down from the high. Last 12 months total ROR was 1.83% as of 10/4/2015.
How Much of your Retirement Dollars
Are You Willing to Lose?
What if you could eliminate the negative years and still participate in the gains of the up years without risking any principle to market risk? Would you want to know more?
Throughout recent years, Americans have been pulling their retirement savings out of stocks and stock mutual funds and putting them into places that they hope are safer.
One beneficiary of this flight to safety has been bonds and bond mutual funds, but many people making this choice are probably unaware of a major risk they are taking.
Interest rates right now are at historical lows. In October 2010, for example, the 5-year Constant Maturity Treasury rate was barely above 1%. There is always the possibility that interest rates could remain at their current levels or fall lower, but clearly there is more room for them to move upwards than downwards.
The issue facing you is that if interest rates rise, the value of the bonds and bond mutual funds that you own will tend to fall. For example, if the Treasury rate was to rise to 4%, a new purchaser could get an interest rate of 4% on a new bond. To induce that person to purchase your bond that has an interest rate of only 1%, you would need to drop the price quite a bit.
What we fear is that folks who have moved their money from stocks to bonds seeking safety may find that they have jumped out of the frying pan into the fire.
There are a wide variety of products that offer assurances of safety, such as savings accounts and money market accounts, but the problem with these financial products right now is that their interest rates are even more dismal, typically well below 1%.
As a person looking to protect and grow your retirement savings, you may be wondering where to turn. Where can you find the safety you desire yet still earn a respectable interest rate? We suggest that you consider Fixed Index Annuities (FIA).
Fixed Annuities offer interest rates that are set by insurance carriers, declared in advance, and guaranteed for at least one year at a time or you can choose 10 year guarantee or 20 year guarantee. These annuities typically offer higher interest rates than you can find on other safe financial products. This is how most pension plans are set up that guarantee you a lifetime income that you cannot outlive. They may or may not have a spousal benefit. The option is up to you with several alternative choices. You can set up your own private pension plan using annuities that you can control.
Fixed Indexed Annuities offer interest rates that are based upon potential future increases in a stock or bond market index, along with the guarantee that if the index declines, your principal is protected. These annuities offer the potential for even higher interest credits due to their index link. Two of the most popular indexes are: 1) The S&P 500 Index and 2) The Dow 30 Index.
All Fixed and Fixed Indexed Annuities offer four very valuable layers of protection.
- They are issued by insurance carriers that back the annuities with a pool of assets called “Reserves” that are mandated and monitored by state insurance regulators.
- These insurance carriers are obligated to use all of their general assets to protect annuity values from the effects of any adverse financial conditions.
- These insurance carriers provide annuity owners with written, verifiable, contractual guarantees that the money you put into an annuity is protected from loss, other than perhaps a penalty for early withdrawal.
- If you have any problem with your annuity carrier, you can contact your state’s insurance department, which has jurisdiction over the carrier.
Thus, if you are looking for safety with better interest rates than you are finding elsewhere, consider annuities.
Feel free to contact Wayne McLeod if you have further questions or need more information.
MFGS Life Parthers
Agency Director and Safe Money Adviser
This article is for general information purposes only. We do not provide investment or tax advice. If such advice is needed, the advice of a qualified adviser should be sought. If you need more info check out – Fixed and Fixed Index Annuities Made Easy.