Counting on bonds for retirement income? It worked for your parents, but it might not work for you. Bond rates are at generational lows and less likely to keep up with inflation than ever before. Dividend strategies can create income, but can leave your principal at significant risk.
That’s okay for some investors, but are you one of them?
In 2008, a basket of dividend “royalty” stocks lost -59% peak to trough. This basket included companies like IBM, AT&T, Caterpillar, Coke & Exxon.
Bond risks are poorly understood by investors. Many municipal bonds lost -30% or more in the 2008 crash.
Fixed Index Annuities (“FIA”) can give investors guaranteed income for life without market risks. Income paid by an FIA may increase over time, sometimes significantly. They can be used as part of a larger financial plan to protect the income you need now and in the future.
It may be that you are better off with bonds, a dividend strategy or alternatives like MLP’s and REITS in your retirement. Fixed and Fixed Index Annuities are not right for everyone. But they can play an important role in safeguarding retirement for most investors, especially when combined with a solid investment plan.
Annuities pay income as long as you live. They can be used to protect against stock market declines and provide safe retirement income.
Testimonials: See how real people are using annuities to protect their retirement and get the lifestyle they’ve earned.
- What Fixed Annuities are good for:
1. Guarantee the income needed to successfully retire.
2. Removing or reducing retirement risk due to stock market fluctuations.
3. When you need to protect your principal, and conservative growth in your portfolio is enough.
4. Minimizing or eliminating the need to make withdrawals from your stock & bond investments.
5. Can defer taxes on investments.
6. Low or no fees.
- What Fixed Annuities aren’t good for:
1. Aggressively increasing the size of your investment portfolio.
2. Leaving a legacy to the next generation (unless you aren’t health enough to get term life insurance).
3. Keeping up with the stock market.
4. All of your retirement money.
What’s the bottom line? When you retire, the assets you have accumulated over time need to begin providing the income you need over and above social security in order to live the lifestyle you want. If you are like most people, you still need some kind of growth in those assets to bridge the gap between your social security and your expenses, but you can’t (or don’t want to) take the risk of losing 50% of your money in a market crash. Combined with an effective investment strategy, The right fixed index annuity could take a lot of stress out of your future, making it easier to enjoy dividends from your stock portfolio without the worry of a market crash.
There are many annuities out there, and most aren’t great solutions.
Need some help understanding what solution fits your retirement best? CLICK HERE to compare bonds, dividend payers and fixed index annuities. Understand the strategy that fits YOU and the retirement you have earned.
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