Do You Have the meaningful to obtain Retirement?
A Must Read for Baby Boomers & Retirees: If you have CD, IRA, 401k, 403b, or other related retirement investment, no matter at what age you are, please read on…
A Loud Personal Financial Alarm Raised by the Bad Economy
Most people leave their retirement funds unattended in IRA, 401K, or other types of retirement vehicles, relying on their tax deferred growth characterize, hoping that the default fund management mechanisms in place somehow work for them in the long run. Well, this approach may work when the economy is good. However, economy comes in bull and bear cycles. At the time of bad economy, many people came to horrible realization that their tax deferred retirement funds truly lose money. In many situations, almost all the accumulated gains in the past decade were wiped out in these accounts in a single bad year. There is no gain to be tax deferred. The suffered loss in their accounts may need another decade’s growth to recoup, if at all. By the time the loss is recouped, the age of retirement is either near or may have already arrived.
Active Management of Investment Does Not Necessary provide Better Results
A complete economic cycle traditionally lasts 4 to 8 years, with most recent trend of prolonged cycle approaching a decade. For the life of any individual, there can only be a few economic cycles to go by. How effectively an individual can ride the bulls and avoid the produces in these limited cycles determines whether such individual can retire with financial security. But how? If statistics show that performance of most actively managed funds is no better than that of most unmanaged index funds, it implies the degree of difficulty for investors in correctly timing the market, already for the most experienced financial professionals, not to mention average folks not in financial investment profession. It is consequently a very unrealistic expectation for an average retiree to be able to actively manage his/her own funds to effectively cope with the unpredictable ups and downs of the economic cycles, taking into consideration one’s slowly but surely fading ability to make sound financial judgment as one ages after retirement.
Low Tolerance to Financial Instability for Baby Boomers and Retirees
however, as one approaches the retirement age, tolerance to personal financial instability tends to diminish. Because retirement age is a time of reduced income and potentially increased expenses, at the minimum in the health care area. The financial needs of a retiree are very real, often immediate but without forewarning, and often at their own schedules tired closely to individual’s physical health or other lifestyle related conditions, but having little to do with economic cycles. The availability of retirement fund consequently in all practicality cannot adjust to the uncertain ups and downs of economic circles, not to mention timing the market for best financial results.
The meaningful to obtain Retirement is to Find an Ideal Investment means
The rising medical expenses and inflation usually make traditional limited retirement savings in IRA or 401K inadequate for individual’s retirement purpose. in addition investment in CD, despite its security in principal, can barely beat the inflation due to its low interest rate and undesirable income tax consequences. Investing in equity securities such as stocks, mutual funds, or ETFs, while having higher profit possible, inevitably exposes retiree to extremely high risks of losing the retirement fund when it is most needed. The difficulty in timing the market in addition as the market unaccommodating character of a typical retiree’s financial needs both make one thing very clear. That is: the meaningful to obtain retirement is to find a obtain investment means, not required to time the market, in addition having the ability to beat inflation, and ideally with guarantee on no loss in invested principals in addition as steady stream of income for one’s life time. There is only one class of financial vehicles in the world that can fulfill all these requirements. That is annuities.
Annuities Can Meet All the Needs to be the Ideal Class of means
An annuity can have the following desirable features: 1. Tax deferred growth, 2. Unlimited annual contribution, 3. Relative high rate of return beating CD, 4. Annual reset characterize of indexed annuity guarantees no loss in principal in bad years and equity investment level gains in good years, 5. Life annuity guarantees steady stream of income for life, potentially modificated with inflation and/or cost of living. 6. Annuity can have life insurance characterize to assistance beneficiaries and to prevent probate.
Suitability of Annuities
Deferred annuity is potentially appropriate for any person younger than 59.5 years old and who has the ability to save additional fund now for use after he/she becomes 59.5 of age. Immediate annuity is potentially appropriate for retiree or anyone after 59.5 of age who likes to make sure he/she never out-lives his/her money by getting steady stream of income from the annuity, either for life or for stipulated time period, depending on the contract.
Make a Timely Decision Instead of Letting the Passing Time Make a Lousy One for You
Management guru Peter Drucker once said: “Management is doing things right; leadership is doing the right things”. It is up to an individual to take the rule in doing the right thing by making informed decision regarding whether to buy an annuity. If the decision is to buy one, it is time to request specialized help. There are websites such as annuity2buy.com providing vendor neutral annuity information and free annuity quotes from licensed financial advisers specialized in annuities. They are certainly good places to visit