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About QLAC Annuities… It's time to learn more about why people buy them
It's no secret people are living longer these days, and you may spend almost as much time in retirement as you’ll spend working. No matter what your profession, ask yourself, “how will you maintain your standard of living over 20 or even 30 years?
IAIt is an important question; several factors will influence your ability to do so. First, The VANISHING PENSION…many companies have replaced pensions with employee-directed retirement plans like 401(k)s that provide no guarantee you’ll have enough money when you retire.
INFLATION NEVER SLEEPS…the constant nibbling of inflation can take a big bite out of your assets. An annual rate of 3.3% can cut your purchasing power in half in 21 years. These factors combine to create a gap between a comfortable retirement and the ability to simply maintain a standard of living. How can you bridge this gap without more risk?
The SOCIAL SECURITY QUESTION MARK…now that the postwar baby boom generation has begun drawing benefits, many experts believe these benefits may need to be reduced or altered if social security is to survive.
The QUALITY OF YOUR FUTURE IS YOUR RESPONSIBILITY…the first step is to understand that you will be responsible for the quality of your retirement. Saving, investing wisely, reducing taxes, fighting inflation, longevity and managing income will play a larger role in your success. These just happen to be the main reasons why people buy an annuity.
Private Sector Workers Wanting Guaranteed Income1 In Retirement May Need To Fund A Private Pension Using Annuities
Sadly, for those wanting guaranteed income other than social security in retirement, there are fewer and fewer career fields offering workers access to traditional pension plans. The private sector, when compared to the public sector and unions - are leaving workers to fend for themselves. Private sector workers have gone from a high of 84% with pensions in 1985 to just 18% in 2015. Source: 2015 Department of Bureau and Labor Statistics
Annuities Can Help Reduce Exposure To Stock Market Volatility
Mismatching investors to risk is nothing new, we know how to use annuities to soften your exposure to the stock market.
It's Easy To Start…Just 3 Steps
Start With A Plan
Most investment strategies begin with tolerance for risk and give little thought to the psychology of risk. Attacking necessity for taking risk at it's origin can significantly alter the rationale for it altogether.
Build In The Guarantees
Knowing what is certain and what is not can be a sure-fire way of diversifying your assets to determine the right amount of each.
Minimize The Unknown Risks
Managing downside risk and the potential for periods of large negative returns can serve you well as you seek stability throughout your retirement years.
An Annuity can help guard against unwanted risk…
You can survive without money, but you can't live without income.
Market Risk
Market risk (volatility) refers to how much the capital markets, and more specifically, the value of your investment assets, fluctuate up and down. All investments carry some level of risk or volatility, and at any time may be worth more or less than what you originally paid.
While market risk may be a known fact for most, the process of planning before investing can perhaps lessen the mismatching of "tolerance for risk" to portfolio allocation and design. Ultimately, creating a more accurate level of expectation.
Inflation Risk
A dollar doesn't buy what it used to. Inflation has eroded Americans' buying power considerably over the years. If you choose investments solely on the basis of safety, you may run this risk.
If your investments don’t outpace inflation, in the future you may not be able to afford the standard of living you enjoy today. Even a 4% annual rate of inflation can reduce your purchasing power by half in just 15 years.
Interest Rate Risk
Persistently low interest rates can have a profound effect on the future lifestyle of retirees. Having to withdraw principal along with interest for an unforseen period of time can be a destructive force on the value of your portfolio holdings.
Longevity Risk
Perhaps the single biggest risk facing retirees is longevity risk. Simply put, longevity risk refers to the risk that you will outlive your assets. A careful balance of when to retire, withdrawals from investment portfolios and the overall allocation of those portfolios present a daunting challenge for those facing retirement.
Certainly, good health and a family history of longevity are relevant factors which must be considered when making investment decisions for the future.
Liability Risk
Lawsuits, liens, judgments, and other financial risks are facts of everyday life. And though you'd like to believe that you're safe, misfortune can befall even the most careful person.
If you haven't done any asset protection planning, your wealth is vulnerable to potential predators and creditors and, should the worst happen, you could lose everything.
We can help you determine if an Annuity is right for you!
…to be fair, annuities are not for everyone.
Annuities can be a valuable addition to retirement planning for people at nearly every stage of life. Although, an annuity may not be appropriate if you’ll need your money to meet short-term goals such as saving for a college education, buying a home, or starting your own business—especially if you’ll need your money before you reach the age of 59½. Our "annuity logic" can help you know in less than 5 minutes if you should consider an annuity. Use the "Annuity Logic" or "Call Us" buttons for a little help.
Should you consider an Annuity?
If any of these life situations sounds familiar, you may want to consider an Annuity.
Getting a head start
An annuity can help families get a head start on retirement planning, and shift some of their tax burden to retirement years. But consider your immediate/short-term needs first and make sure you have sufficient liquidity for unexpected expenses.
Need to catch up
The demands of saving for college or a home may have limited what you could invest. Unlimited contributions and tax-deferred compounding can accelerate your investment plan and may help you catch up with your retirement goals.
Close to retirement
Your money has to last for the rest of your life, so consider what you want carefully. Think about how much income you’ll need when you stop working, and make a plan. An annuity can help you manage income and taxes while your money keeps growing.
Already retired
By now you've realized the challenge of creating a consistent paycheck for life. Rises and falls of the stock market as well as persistently low interest rates can place an extraordinary burden on asset preservation and income production.
Reduce volatility
Because it's not what you make…it's what you keep! Our one-hundred + years of experience has proven time and again, the more guaranteed income that is accounted for in retirement - the less investment risk our customers need or desire to take.
Create balance
Once you solve the income part of the retirement equation, it's a lot more simple to find balance within the investment side of your portfolio. Fortunately, we thought of that too! We've been providing high-quality investment advice as far back as 1954.
Plan for longevity
If you’re expecting to live on investment income from securities in retirement, you should think long and hard about the risk to your lifestyle should an extended period of volatility occur within the stock market. No matter how hard you try, you just can't squeeze orange juice from a lemon.
Tax control
If you're investing in securities, savings or CDs, you may be paying taxes on all the capital gains, dividends and interest you receive each year, whether you need the money or not. An annuity can help control when you pay your taxes and help lower the taxes on your Social Security benefits.
Selling a business
Then your business can no longer pay you so, you’ll need something that can. Buying an Annuity from part of the sale proceeds can alleviate concerns about outliving your money by paying you a guaranteed income for the rest of your life1 (based on your contract’s value).