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You Owe It to Yourself to Consider a Guaranteed Retirement ContractBy
Friday, March 6, 2009
Will you have enough money in retirement... or will you outlive your savings?
How long will you live? How high will inflation be? What will happen to the stock market and the economy? All these things affect your retirement income... and it's absolutely impossible to know the answers. That's why you should make sure you've got at least a certain level of guaranteed income. Even in the worst-case scenario, you'll know you've got enough money to meet your basic expenses. If you've got a pension, that's a good start. The problem is, unless you're a lifetime teacher, a postal employee, or a hotshot at a Fortune 500 company, you probably don't have a lucrative pension. There's Social Security too, of course. But it is really only meant to be a safety net. And as I'm sure you know, Social Security is facing major problems in the years ahead. One way to be prepared is with a "guaranteed retirement contract." You may have heard of this investment by another name: an annuity. An annuity is a product designed to pay retirees guaranteed income. The ones I recommend are like mutual funds that offer you insurance. No matter what happens in stocks, bonds, real estate, or the rest of the economy, your income will never go down. It's the only investment in the world – besides Social Security and a pension – that can guarantee you a certain amount of income, for as long as you live. The simplest way to explain an annuity is this: An annuity is part investment and part insurance. It's an investment in the sense that you put money in and hope to get back more later, depending on how the investment performs. It's insurance in the sense that you pay a premium to make sure your money will never lose value... and you will collect a worst-case gain. And because the IRS treats annuities as an insurance product, your money grows tax-free. (Annuities are taxed like IRAs, but they're not subject to annual contribution limits like on IRAs.) I know what you may be thinking... Over the years, annuities have gotten a bad name. But according to financial planner (and my good friend) Jeff Winn,"Everything you knew about annuities five years ago has changed today. Costs are lower, benefits are higher, the investment options are night-and-day better... Competition has heated up in the industry, and that's been great for investors." Today, there are literally thousands of annuity options: You can invest in an annuity that pays you for the next five years or the next 10 years... or one that pays you for as long as you live. You can find one that pays you immediately or defers your payments for 10 years or more. You can buy an annuity that increases your payouts when inflation rises or when stocks go up... or one in which the payouts stay the same for the rest of your life. I think this is one of the reasons why these things aren't more popular... you have too many choices! Because of the choices available to you, and because each individual's circumstances are different, I can't say for sure which annuity is the annuity for you... But here are some of the options I think will get you the most out of your guaranteed retirement income: *Choose an annuity that will guarantee your payouts will never go down... but leave plenty of upside for your payouts to increase. *Look for a good selection of subaccounts to choose from... so you can get some stock market upside without the downside risk. *Choose an annuity that will give you payouts for life, not over a fixed term. This will give you maximum peace of mind. *Add a "death benefit," which will guarantee you and your heirs get at least what you put into it. You shouldn't tie up all your money in an annuity... But guaranteed income-for-life annuities are ideal for a small piece of your retirement money. They allow you to know, beyond all reasonable doubt, you'll have at least a certain level of income for as long as you live. You owe it to yourself to seriously consider them for a portion of your retirement money. Good investing, Steve P.S. My latest write-up details not only "Guaranteed Retirement Contracts," but also the lowest-risk, highest-reward gold investment available right now. It was actually created by the U.S. government and gives you ownership of real gold... with the realistic chance to make 1,000% over the next few years. Click here for the full story...
Further Reading:
How to Use Your Retirement Savings, Penalty-Free... at Any Age Market NotesTHE GOLD/HOG RATIO HITS A FANTASTIC NEW HIGH
Our gold/hog ratio is bonkers right now...
In late 2007, we introduced a ratio that captures the biggest trend in the world. It's the ratio between one ounce of gold and one share of Harley-Davidson (HOG) stock. We call it the gold/hog ratio. On one side of the ratio, gold represents real, timeless wealth. It's the only form of money that can't be conjured up out of nothing by spendthrift government bureaucrats. Gold is "honest money." Harley Davidson is a fine company with fine products. But it also happens to represent America's desire to spend more than it earns... to buy overpriced toys on credit. The interplay between these two assets shows the deflating value of "landfill stuffing" vs. sound money. When we first produced this ratio in 2007, gold was going for about $800 per ounce. HOG was going for $45 per share. The ratio stood at 18. Since then, gold has climbed above $900 an ounce. HOG has plummeted along with the average American's net worth. Shares go for $8.25 right now. This "gold up, HOG down" price action produces the soaring uptrend you see below... and our gold/hog reading is around 100. |
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