The Fallacy of the Financial Advisor

I can’t help but wonder when I meet retirees, with a total net worth between $200,000 to $400,000, who have a financial advisor that is either an annuity sales person or a lower echelon stockbroker.

Instead of using these asset gathers, these retirees could benefit more from simple income and income planning advice about income and income planning.

Most super affluent retirees have CPAs, attorneys and multiple financial advisors, while affluent retirees either have a quality financial advisor or handle it themselves.

An Emphasis on Education

One of the great things about the MoneyShow is the emphasis on education. The people I’ve met through the MoneyShow are more advanced and knowledgeable than the people I meet at retirement seminars.

This is a true testimonial to the service the MoneyShow provides to hundreds of thousands of people.

Everybody today needs to be a specialist. There is simply too much going on and too much regulation.

My specialty is annuities and tax-free wealth transfer which is known as the anti-annuity. I also do a tremendous amount of long-term care and home health care planning even though I do not sell those products.

Keep it Simple

There are experts who write covered calls for income, there are bond experts, and there are dividend paying stocks experts.

It’s a complex world and nobody can be all things to all people. Most of the time I find that a little common sense goes a long way.

People who are retired should have simple goals. Don’t run out of money; prepare for health costs, provide what legacy benefit you want and most of all have a great time!

If I can help you with any of that feel free to email or call me!

For more info, contact Phillip Wasserman:
Pwasserman@aol.com or 800-254-9567.

Protect Yourself from These Retirement Threats

Source: American Advisors Group

Source: American Advisors Group

“Aging is humanity’s greatest, most important, and most enduring discovery. The discovery and exploitation of human longevity is what has led to the globe-dominating species we have become.” — Dr. William Thomas, M.D.

For most Americans today, retirement begins at around 63 years old and lasts roughly 18 years. After years of hard work, retirees deserve to enjoy their remaining years in a financially stress-free environment. Retirees must have a safe, sustainable retirement income. Several different paths and products that, in addition to your income, should assist your revenue as you near retirement, if needed. No one option is the perfect fit, but with proper guidance and research, you can carve the ideal path for you and your loved ones.

Sometimes, however, threats to your nest egg can arise. It’s crucial that you properly maneuver these potential pitfalls, or your hard-earned retirement could be threatened.

Inflation

Inflation can take down even the strongest retirement plans. Always keep an eye out for the interest rate in your savings account is paying. With inflation likely outpacing your interest rate, prices on needed goods and services can sneak up on you. This also goes for travel and medical needs.

If you feel like inflation could dismantle your agenda, consider an additional revenue stream like a hybrid annuity.

Health

Going beyond medical costs, seniors require more medical attention regarding daily and long-term care. Over time, they can add up and impact your savings more than expected. Remember to keep prescriptions, doctor bills and hospitalization fees all in the forefront of your mind. If these medical issues arise before you hit retirement, consider that you may have to take time off work. This can impact your earnings and throw off your original plans. If a health issue looks like it could hinder you pre-retirement or during, be sure to adjust your plan accordingly.

Age

When did you start to plan for your retirement? If you answered with a relatively young age, congratulations. You’re putting yourself in a great position. Beginning a 401(k) in your 20s will provide you with a larger and longer return on investment over time. The longer you wait, the less you will have saved. It’s as simple as that.

If your company offers a 401(k) plan, take it. If not, start a retirement option on your own. With life expectancies lasting longer, you’ll want to have stored away as much as possible.

Fees

Let’s be real, fees can be confusing, even for the experts. And even when you do understand them, you might find that they are incredibly high! Unfortunately, fees are sometimes an unavoidable aspect of retirement. That’s why you need to make sure that your retirement expert is just that. With a proper advisor in place, you will know exactly what you are paying and when.

None of us like fees, but at least you’ll know what to expect when a payment is expected.

Taxes

Like fees, taxes can be a costly oversight if you make a mistake.

If your plan includes 403(b)s, SEP IRAs, 457(b) plans and/or Traditional IRAs. you’ll have to factor in minimum distributions once you reach your 70s. Depending on the sum, you could wind up paying a large portion to the IRS each year. To minimize this risk, consider coversion options that may align with your goals. Other options are out there to consider. As always, consult your retirement professional before making any decisions.

Risk/Volatility

The fall of the stock market is a common concern for retirees. Many think that if it crashes as they edge closer to retirement, all their effort goes down the drain. However, your retirement should live out a crash many times over, if planned correctly.

If you find yourself concerned, don’t worry, you have options. Bond funds, mutual funds, ETFs and other investment options can lessen your worries. Choosing the right options and investments should make this a minor issue as you approach your later years.

The Best Retirement Planning Advice Ever

Phillip Wasserman retirement planning

My hobby is playing tournament poker. I’m lucky enough to get to play once in a while with a lot of the people you see on television. The nice thing about tournaments is that you can only lose what you paid to enter.

A few months ago, I went very deep in a large tournament. I called a close friend of mine who finished second in the World Series of poker a few years ago. My friend was lucky enough and skilled enough to win almost $6 million at the age of 25. The purpose of my call was to ask him advice for the next day and he had one sentence for me…don’t do anything stupid.

The more I think about this the more I realize this applies to retirement planning. Most people have won the game and they just need to enjoy retirement and not do anything stupid.

What they should really do is guarantee their income and make sure they have extra income if a spouse dies or a pension is lost. They should also make provisions for long-term care expense and home health care. After that they should enjoy their retirement.

They should certainly avoid ridiculous products with very high fees like variable annuities and should always ask whoever they’re dealing with what their fees are.

If retirees want to leave money to their children, they should do it through legacy planning because people are living longer than ever before and retirees might need their money for income while they are in their 80s and 90s.

I do income planning, legacy planning, long-term care, and home health care planning through the use of hybrid insurance products. I don’t sell long-term care coverage but I can show you how to get it through a hybrid insurance product with no medical questions and no extra expense.

Around a year ago, Barron’s published a great article about this and I’m happy to send you the link. Email me or call me and just remember don’t do anything stupid and have a good time!

For more info:

Pwasserman@aol.com or 800-254-9567.

Safety of Insurance

Phil WassermanRecently, we have all witnessed a dramatic change in the attitudes people have about their money. Investors have begun seeking ways to properly eliminate risk and preserve long-term, guaranteed growth. When people seek safety and protection, they often consider utilizing the services and guarantees of America’s insurance industry. For many years, people have considered annuities to be a safe haven for their life savings. The following is a brief outline that reveals some of the reasons annuities and insurance companies are so safe.

Capital & Surplus Requirements

Insurers use capital and surplus as a buffer to finance growth and pay for emergencies and other business commitments. Each state specifies a minimum dollar amount for required capital and surplus that each insurer must maintain.

Risk Based Capital Ratio (RBC)

This sophisticated formula allows regulators to evaluate whether the insurer maintains sufficient capital in relation to the relative risk within the insurers operations. Each year, the RBC levels for each company are reported to the National Association of Insurance Commissioners (NAIC) and the state where the insurance company is domiciled. These ratios are then compared to the standards set by the NAIC for monitoring. The NAIC prescribes action based on 6 categories within the levels of performance for the RBC Ratio.

Solvency

Annual Statements are filed with every state where the insurance company is licensed to do business and a copy sent to the NAIC. This allows for a thorough annual review of overall solvency within the company.

Other Ratios and Formulas

The Insurance Regulatory Information System (IRIS) is a system that has been developed to monitor financial conditions and prevent insolvency within an insurer. There are a total of 12 financial tests performed within the IRIS. The Financial Analysis and Solvency Tracking (FAST) system was created for additional analysis of larger insurers. The FAST system is applied to review the insurance company’s financial status every three years. The FAST system reviews both current financial records along with a review of the company’s 5-year history.

Tax-Deferred Fixed Annuity

phil wasserman financeA tax-deferred fixed annuity is an efficient retirement plan that can protect your assets’ values while allowing its value to continue increasing. Similar to a certificate of deposit, a tax-deferred fixed annuity guarantees you a multitude of beneficial guarantees. They include:

– Return of your principal

– Return on your principal

– Defers tax liability until cash is withdrawn

– Lifetime income

– Guaranteed principal

– Guaranteed interest

– Avoids high costs and delays of probate

It’s not only about the guarantees that make this plan alluring to many retirees. It’s also about what you earn over the years. By accruing interest on your principal, your assets are not only secure but growing as your approach your retirement. By compounding your interest, you are essentially adding value atop your already valuable base investment.

Remember, no annuity is built to satisfy the desires of every person and income bracket. Usually, a tax-deferred fixed annuity is best for those able to invest $10,000 or more, but that varies with the product and plan you opt for. Be prepared to make the investment in one swoop as most of these ventures require a one-time investment rather than an incremental approach. In doing so, you have locked in your investment. From there, your account’s value grows over time at a guaranteed rate.

Be sure to check your state laws before making the investment. Depending on which state you live in, your situation could vary to a degree. A multitude of variables including proceeds from state inheritance taxes, medical needs withdrawals and account value protection can alter from state to state.

As is the case with any retirement plan, disadvantages can arise. If a beneficiary receives your investment, they will ultimately be taxed in a higher tax bracket. Remember that all income gets taxed as if it is your standard income. Again, depending on the state you reside in, premium taxes could devalue the amount on future payments.

That’s why you always need to consult with an annuities expert before taking the plunge on any investment. Your future depends on this decision, and your life’s work deserves to be protected. By making the sound choice, be it a tax-deferred fixed annuity or otherwise, you position yourself to have the most enjoyable retirement possible. You’ve put in the hard work your whole life. Now it’s time to make the right choice.