Monday, March 4, 2013

Who Said It’s Not Possible to Retire with Absolute Peace of Mind These Days?

Who Said It’s Not Possible to Retire with Absolute Peace of Mind These Days?

The retirement landscape today is undoubtedly more challenging than ever: guaranteed corporate pensions now belong to the dinosaur years, and the stock market has been nothing short of chaotic. Meanwhile, we’re living much longer, creating the perfect storm for many of us to run out of savings/income midstream. Truly, this is the foremost threat facing retiring boomers.

Julie and Craig experienced precisely that threat in no uncertain terms. The 60-year-old business-owner duo had been fairly aggressive investors prior to the 2008 stock market tsunami, after which their nest egg shrank by almost 50 percent. Among other things, the couple is looking to retiring in the next 10 years with an annual income of $85,000. Social Security is only scheduled to bring in about $35,000 a year, so their goal is to somehow turn their once-upon-a-time million dollar nest egg – now worth approximately $600,000 – into a yearly income of $50,000 for the rest of BOTH their lives. Given that they’re both from families with pretty long life expectancies – and trust me, they’re not complaining! – they’re rightfully concerned about the longevity of their income.

Here’s the even trickier part. Every advisor they’ve met has told them it might be possible to achieve their desired $50,000/year income – but offers no guarantees. Smartly, this couple said, “We don’t want to just hope for it.”

The Solution

Believe it or not, there are products available today that can easily solve Julie and Craig’s problem. They can make sure their money grows at a certain guaranteed rate for the purposes of their income, while guaranteeing a specific income for their joint life spans, however long that may be, regardless of what the stock market does. Their specific contract guarantees a 6.5 percent annual compound rollup rate. So in 10 years, their $600,000 is guaranteed to be worth exactly $1,216,385.08 in their “income account.” That works out to a guaranteed yearly income of $60,819.25 – for as long as they both live.

It’s as simple as that. What would happen if they decided to retire sooner than 2023? Of course, that would mean a smaller income account value and yearly income. Just to clarify a couple things. These figures are specific and do not depend on what the stock market does. And when one spouse dies, the survivor will keep receiving the same $60,819.25 for the rest of his/her life. So what happens if they both die before depleting their money? Any money left in their “contract value” goes to their named beneficiary. However, if they follow their families’ trend and outlive their “contract value,” their guaranteed $60,819.25 a year will not stop.

The Bigger Question

How come none of the previous advisors they met with discussed this option with the couple? I can only speculate, but perhaps they’re not even aware that a program like this even exists. Or maybe they are captive advisors working for companies that offer a certain limited number of choices – although, quite frankly, many in that position would never admit it.

In the end, Julie and Craig found the peace of mind they were seeking by securing their future. If you’d like more information about how these contracts work in general, as well as some important caveats, please download a free copy of our Set For Life special report.
 Do you have questions or concerns about your finances and retirement investments? Call us today at  877.656.9111  or visit us on the Web to schedule your no-strings-attached consultation!

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