Presentation on theme: "The Benefits of a Fixed Index Annuity. The Benefits of a Fixed Index Annuity What others think about Fixed Index Annuities How they work Companies."— Presentation transcript:
2008 Bond Returns: High Yield Bond Funds - 23.18% Government Bond Funds -0.51% Corporate Bond Funds -7.47% Municipal Bond Funds -5.51%
From 5/03/2011 to 8/10/2011 t he Dow dropped 16% ! Bond Values between 8/31/10 and 12/15/10... iShares Barclays 20+ Year Treasury (TLT) -15.1% Vanguard Extended Duration Treasury ETF (EDV): - 23.4 % Market Instability Continues to be the Norm - Market Instability Continues to be the Norm -
Just imagine: Investors lost nearly a quarter of their money in less than four months in what many believe to be the world's safest investment — U.S. Treasury Bonds. QUESTION: Do Bonds or Bond Funds have the potential to increase in value, in today’s interest rate environment? * Money and Markets Archive Dec 23 rd 2010 Today’s Bond Market
The market has averaged a downturn once every four years! In the past 56 years (1954 – 2012) it has had 14 down cycles. From 2000 to 2013 the S&P has had NO GROWTH! Look at the number of down years since 2000. Trying to grow your money in the Market without a Safety Net is Risky.
We have seen 40% downturns so how long will it take to recover from a 50% loss if it comes? Keep in mind, you will need 100% in gains to recover from a 50% loss!
200,000 -40% 32,400 -80,000 -12,000 108,000 1 st year Income +30% 2 nd year Income 128,400 -38,520 31,152 3 rd year Income -12,000 -30% 77,880 +40% 4 th year Income -12,000 97,032 Let’s Talk About Distribution Example of how an up and down market with income withdrawals can effect the growth or recovery on your retirement account where a FIA is NOT used. This hypothetical non FIA account is down $103,000. How much of that did you get to spend? You only took out 48,000 in 4 years but the account is down a lot more than 48,000.
Choosing the right Retirement Vehicle for retirement can be difficult... - No Risk - On one hand, you want the safety and guarantee of principal and past earnings. In the past, Retirement Savers had to make a decision on which hand to choose from… - Has Risk - On the other hand, most people prefer the potential of higher returns by being linked to the market, a return that a fixed rate investment cannot offer.
...That was then, this is NOW! Now you can have the best of both worlds! Guarantee of principal with a minimum interest rate guarantee. AND The potential to participate in stock market-linked growth.
$136,937 02’ 08’ 100K 90K 80K 110K 120K 140K 130K 98’ 99’00’ 01’ 03’04’ 05’ 06’ 07’ 150K 160K 09’ $125,080 $78,869 $111,033 $145,542 $156,857 $100,770 $99,228 $146,853 S & P 500Index Credits Min. Guaranteed Contract Value 10’ $160,747 $108,789 170K 11’ $171,388 $107,857 $105,000 This line represents what it would have done in the income account if it would have had a Guaranteed Lifetime Income Rider that is now available with some annuities… 5% Bonus with 4% MINIMUM roll up on Income Account for income planning purposes; Some products have even higher bonus and/or roll up rates. This line represents what it would have done in the income account if it would have had a Guaranteed Lifetime Income Rider that is now available with some annuities… 5% Bonus with 4% MINIMUM roll up on Income Account for income planning purposes; Some products have even higher bonus and/or roll up rates. $174,832
Federal Reserve Chairman Ben Bernanke has a majority of his liquid wealth - between $1 million and $2 million - invested in annuities … 22,000 Fed. Reserve Employees, have 75 percent of their assets - that's $3.2 billion, invested exclusively in annuity contracts… Federal Employees have followed Uncle Ben in choosing Annuities vs. traditionally held investments. Research done by - Barry Dykes June 19, 2009 Article in Medical Economics Ben Bernanke
It was created to compete with very popular index funds, mutual funds that track a stock market index. I have to admit I like the concept – Pg 511 If you do not want to take any risks but still want to play the stock market, a good index annuity may be right for you. Pg. 513 Suze Orman THE ROAD TO WEALTH
A Fixed Index Annuity allows you to take advantage of market-type growth without the potential of any market-type loss. In contrast to a stock or mutual fund vehicle where the investor bears the market risk, the Fixed Index Annuity design insulates you from the results of a market downturn. The Benefits of a Fixed Index Annuity Potential of Stock Market Linked Growth
Safety, Guarantees, and Growth Potential An Fixed Index Annuity (FIA) provides you with all of the best features of a traditional fixed annuity ; Plus gains linked to a stock-market Index. Guarantee of Principal Minimum Interest Guarantee The Power of Tax Deferral Potential of Stock-Market Linked Growth The Benefits of an Fixed Index Annuity
There are basically three things that will cause you to run out of money -
Easy to Manage Guaranteed Minimum Returns Share in Market Gains but not the losses Lifetime income stream for you and your spouse No management or basic policy fee (fee possible with Income Riders) 401k, IRA, ROTH IRA, etc.: Roll-over eligible Tax Deferral and Social Security Taxation Benefits Hedge against health related costs: Income and Assets Legacy Planning: Can avoid Probate