Category Archives: Preserve Your Nest Egg

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Banks Vs. Insurance Companies

Whether you’ve moved to a new house, new city, new state, or even new country, odds are you’ve experienced what comes along with a major move. As you know, one of the most important factors in any move is finding the best neighborhood, right? “Best” can mean anything from the safest to the most affordable to the most convenient or all of the above.

Bottom line is, you want the best. Who doesn’t, especially when it comes to a decision that big? The comparison of different neighborhoods is much like the comparison between banks and insurance companies. Just like you want to find the best place for you to live, you need to find the best place for your money to live as well.

There are many major differences you may want to consider before trusting your life savings to one. Among these major differences, and perhaps the most important, is what happens to the investors/depositors if a bank or insurance company fails.

Let’s take a look.

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Jon Had No Clue He Was Paying 4.85% in Annual Fees…

Webster.com defines the word “variable” as: “able or likely to change or be changed; not always the same; subject to variation or changes; fickle, inconstant.” That sounds like a pretty accurate description of the stock market, doesn’t it? There is a reason the variable annuity has its name, and that’s because it can be just about as unpredictable and dangerous as the stock market. This is especially true for people heading into retirement (or already in retirement).

I think variable annuities can work well for some people. However, retirees often don’t fit into that category for the simple fact that retirees need consistent and reliable income, which variable annuities cannot provide.

To give you a “real life” example of a variable annuity working against someone, I want to share with you a story of a guy I met in 2003. To protect his privacy, I am going to call him “Jon.”

When Jon came to see me, he had a $600k variable annuity that he had purchased on January 1, 2004. At the time, Jon thought he was only paying 2.4% in annual fees for his variable annuity. Jon is actually a very bright man, but he didn’t ask all of the questions he was supposed to ask before purchasing his variable annuity…

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One of The Best Tools for Effectively Regulating Cash Flow

How you regulate your cash flow can make the difference between financial success and financial failure. Thanks to software developer Don Blanton, we have the Personal Economic Flow Model to give us a visual picture of how your money flows.

If you are able to visualize your money from perhaps a different perspective than you have ever seen before, it may help you to increase the overall efficiency of how you manage your cash flow.

To begin, you have a lifetime wealth and income potential. Everyone does. It’s the total amount of money that will pass through your hands during your working years. It is a large but finite amount. The primary source of capital is probably the earnings from your occupation.

You may also have other sources – an inheritance, for example. We usually receive our money from our employer on a weekly or monthly basis. For some, the amount fluctuates from pay period to pay period. For others, it is a fixed amount.

Now imagine that money in a large tank that is 

being fed by your paychecks week in and week out.

At the bottom of the tank is outflow pipe. Fortunately, for you, there is a regulator valve that you can control. You can choose to divert some of your lifetime capital into savings and investments.

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New Study Reveals Insight Into Americans’ View on Retirement

Franklin Templeton Investments conducted a new 2015 survey called the “Retirement Income Strategies and Expectations (RISE) Survey,” and I recently read an interesting article on Yahoofinance.com that discusses the survey’s findings.¹

This survey included 2,002 Americans, and Franklin Templeton Investments says their “annual survey reveals significant insights about the views, expectations and income strategies people have regarding retirement.”²  The company also said this survey has taught them “more about individual behaviors and the impact working with an advisor has on helping people prepare for what’s next.”²

I found this survey very interesting, so I wanted to share my opinion on some of its findings.

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3 Huge Problems Retirees Are Facing Today

With every generation and decade comes a new problem, right? Unfortunately, that is the world in which we live. The good news is, there are solutions to these problems. Let’s first quickly address some of the biggest problems retirees may face today…

1) Lack of pension

Over the past several years, the use of traditional pensions in retirement keeps getting lower and lower. In today’s economy, fewer employers are offering pensions to their employees. If you’re retired or retiring soon, it is likely you don’t have a pension either. You might not have the luxury your parents had when they retired. Being able to comfortably retire knowing you have permanent, reliable income from a pension is not really an option today.

Because of this shift in retirement planning, people are worried about not having a predictable and reliable source of income. People retiring want to ensure that their living expenses are covered once they retire. Once upon a time, a pension offered them this comfort and reassurance. Another sad truth is that, for many people retiring, Social Security will not be nearly enough to cover everything they need it to cover.

What does this mean for you?

Well, here’s something interesting… Pensions weren’t much of a necessity back in the 80’s and 90’s. From 1982-2000, the S&P was up 1000% and the NASDAQ was up over 2000%! That’s crazy, right? People who were retiring during that time weren’t very concerned about pensions. It didn’t matter as much if they did or did not have one going into retirement. Why would it matter, when they were making stock market returns that were in the double digits?

What’s the problem with that mentality? It all boils down to the good old saying, “what goes up, must come down.” I hate to be cliché, but it’s true. Just look at what happened in the stock market after those booming years. Nobody knows what the stock market will do. It is NEVER a guaranteed thing, and do you really want to subject your livelihood to the erraticism of the stock market? Do you want the stock market to be the one determining how you live your life in retirement? No, YOU want to be the one determining that. You want to be certain that your living expenses are covered no matter what.

Well, you can do that without the use of a traditional pension. But let’s first touch on the other two problems you may be facing in retirement.

2) Running out of money

This problem ties in with the previous problem, the lack of a pension. People retired or soon to retire are very concerned that they may run out of money in retirement. They are worried that what they have saved during their working years isn’t enough to sufficiently get them through retirement, worry-free.

People want security in retirement, and rightfully so. They want an income that is guaranteed to always be there no matter what happens in the stock market. Who wouldn’t want that? Because of this fear people have, they are sometimes forced to work longer than they had originally intended, thus putting off their retirement.

For others, they are forced to monitor every last dime they spend in retirement to ensure they don’t run out. That’s no way to retire! Isn’t retirement supposd to be about relaxation and visiting your grandchildren? It may seem like a fantasy to some, but it’s a reality for many (the ones who take the right approach to retirement).

3) Inflation

This problem ties in with the first and second one we just discussed. Inflation is a huge problem people are facing in retirement. People are worried that their retirement income won’t be able to keep up with the rising costs.

Well, what if I told you there is something out there that can solve ALL three of these problems and more? Moreover, many people would argue that this product is better than the traditional pension.

It’s like a modern-day pension, designed to keep up with modern-day problems.

What is the name of this product? A fixed indexed annuity. I know you’ve read or have been told about it before. What you may not have been told is exactly how to use this in your overall retirement plan. Another thing you might not have been told is that the fixed indexed annuity isn’t for everyone! But, if it does work for you and your situation, it could quite possibly be the best thing to ever happen to you.

I’ve figured out a strategy to use the fixed indexed annuity, sometimes coupled with something else, to give you the MOST income you can possibly receive with what you’ve saved over the years.

Let’s have a quick chat to see if this is even something worth exploring for you. If not, it’s no biggie and we can move on. If it is, then I’ll be happy to show you the details of the plan. Just give me a call at 1-352-561-4571. You can also schedule yourself on my calendar, right on this page. Just look to the right, find the button that says “schedule strategy session,” and you’ll be on my schedule in no more than 30 seconds!

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Investments vs. Savings: A Comparison Every Retiree MUST Understand

Every retiree wants to know the answer to these two questions:

1) Is my money protected?


2) How do I know my money is protected?

In order to carefully answer those questions, let’s first examine the very important difference between investments and savings.

Investments: Investments are designed for growth accumulation, though the possibility of that happening is never guaranteed. They have the potential to rise in value just as much as they have the potential to lose value. Investopedia defines “investments” as “an asset or item that is purchased with the hope that it will generate income or appreciate in the future.”

Savings: Unlike investments, the primary purpose of savings is not for growth accumulation. Savings vehicles are safer than investments and are designed to protect your principal.

Once you enter retirement, your priorities need to shift, but that does NOT mean that you shouldn’t invest in the market. I know that a lot of articles you read suggest that you stay clear of the market in retirement, but that doesn’t necessarily have to be the case for you. There is just a different way you should go about it in retirement.

When it comes to investing, people’s #1 interest is how they can grow their investment. They want to know what type of return they will get on their investment, and are less focused on the safety of their money. If you’re going to put your money into investments, you know there’s a risk involved with it. People who place their money into investments while they’re still working are less concerned with receiving a reliable income from their investment. They already have a reliable income from their job, so they just want to see their investment grow, rather than provide them income that they don’t need in that moment.

That’s the problem with investing as a retiree, and the reason you have to approach it a little differently.

Investopedia defines an investment as something that is purchased with the “hope that it will generate income.” I want to emphasize the word “hope” here. In retirement, is it comfortable to wake up every day hoping to see a return on your investment and hoping that it produces adequate enough income to cover your basic living expenses at the very least?

It’s good to have hope, but unfortunately the mentality of having hope is not going to cover your living expenses in retirement. If you want to live your retirement confidently, knowing that you will never have to go a day worrying about generating income, growth accumulation will become a secondary thought and preservation will become the primary one.

I am not suggesting that investing in the stock market is a bad thing. Again, it isn’t. In fact, I recommend it for many people who are in the right situation. But focusing solely on growth accumulation is never guaranteed. It will NEVER guarantee you that consistent paycheck month in and month out, and in retirement you need guarantees. Focusing on preservation, however, will. Let me explain…

The #1 thing people think about when it comes to savings vehicles is the security of their money.

They want to know that the money they depend to live on in retirement is 100% safe and protected no matter what. On top of that, they want to lock in a guaranteed income stream that they cannot outlive no matter WHAT happens in the stock market. People focused on saving vehicles are less concerned with the return of their money as they are with what type of guaranteed income they can receive from it.

Well, what if I told you that you could have the best of both worlds? You can lock in a guaranteed income stream and also participate in the stock market. Better yet… that guaranteed income stream can INCREASE from the stock market!

What I mean by that is, you can put your money into an account that isn’t directly tied to the stock market, but participates in market gains when the market performs in our favor. And, when the market loses (which we all know can happen in the blink of an eye), your account doesn’t lose any value, at all. None. Your income just simply remains the same.

Of course, there are more details to this account that I would like to share with you. I can’t quite outline it in a blog post, though, so feel free to call my office at 1-352-561-4571 and I’ll tell you more about it. We can see if it’s a good fit for you, and, if it isn’t, we can look at other options that would be! Or, if you don’t feel like calling right now, just simply scroll up and schedule yourself on my calendar right now! Just look for the button that says, “Retirement Strategy Session” and pick a time that works best for you!

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What is a Guaranteed Lifetime Investment (GLI)?

I’ve had clients tell me the Guaranteed Lifetime Investment (GLI) was the “answer to all of their retirement concerns.” That’s a pretty big statement, which is why I want to tell you a little more about it…

The reason people love using the GLI as part of their overall retirement plan is because they get the benefits of the stock market without all of the “baggage” that comes with investing directly into the stock market. What I mean by that is, the GLI allows you to participate in market gains without the threat of market losses.

Let me explain…

People like the concept of the stock market because of the earning potential. But, as you know, that earning potential comes with a huge losing potential, as well. In retirement, that’s not exactly something you should be gambling with. However, just because it isn’t smart to solely invest in the stock market in retirement, doesn’t mean you shouldn’t have the opportunity to participate in the market. That’s where the Guaranteed Lifetime Investment comes into play in your retirement plan….

The Guaranteed Lifetime Investment can get you substantial returns with NO downside risk.

How Does The Guaranteed Lifetime Investment Work?

 The GLI is linked to a specific index investment, and your returns are linked to the performance of that index. What you must understand here is that your money is NOT invested in the stock market. It is linked to the stock market through these indices. It is not invested in those indices or the individual stocks that they track.

For example, let’s say your GLI is linked to the Dow Jones Industrial Average. If the value of the index to which your GLI is linked goes up by 6%, then so does your account balance. If the index goes up by 8% the following year, then your account would go up by 8% as well. You get the idea.

Now, what about when the market goes down (as we have learned can happen overnight)?

What happens if one year the Dow Jones drops by 5, 20, or even 40%? That’s where the “guaranteed” part comes into play. With a Guaranteed Lifetime Investment, you are GUARANTEED to never lose. Ever. You won’t gain anything, but you won’t lose anything either. No stock you buy will ever come with the word “guaranteed” attached to it. That is why no person entering retirement should 100% rely on stocks to provide them stable income.

To put it simply, unlike traditional investments, your GLI account sits on the sidelines and waits for the market to rebound. Your account then grows by tracking the upside of the market, but never the downside, and your gains are locked in at the end of each year. Think of a car that is designed to avoid potholes in the road 100% of the time, guaranteed. Every time the car is in motion and it sees a pothole, it simply avoids it and the ride continues to be smooth and effortless. That’s sort of what it’s like to have a GLI in retirement—a smooth, safe ride.

This product was designed to give people the best of both worlds in retirement: stock market participation without the risk, and guaranteed income that has the potential to increase. The guarantees don’t stop there, though.

With some of these GLI products, you are guaranteed a minimum return on your account, regardless of market performance. Yes, that means that, even during a down year, your account still wins. It might not be a huge win, but a small win is better than a huge loss, right? A huge loss is what you can (and will) eventually face if you go the traditional route in the stock market.

Is There A “Catch” To The Guaranteed Lifetime Investment?

That depends what you define as “a catch.” There aren’t any hidden fees (like there can be with variable annuities), or some huge red flag that you should know about. The only “catch” here is that Guaranteed Lifetime Investments generally have a cap on the upside. That means that you can only earn so much with market upside.

In other words, if you want a contract that gives you that no-loss guarantee I was just telling you about, you may have to agree to a cap on earnings. The amount can vary from contract to contract, but let’s pretend that your contract has an 8% cap on earnings. If the market shoots up 25% one year, your account would rise in value by 8%, not 25%. Your account wouldn’t participate in all of the gains that year.

Is the tradeoff worth it? Does it pay to limit losses if that means you have to give up the full benefits of a raging bull market? The numbers say YES! 100%. It’s a good product for most people, and one of the BEST products for retirees. The proof is in the numbers, though, right?

To give you a general idea… From 1995-1999, we saw one of the greatest bull markets of all time. The stock market was the place to be. Now, fast forward just a bit to the two ferocious bear markets that kicked that bull so far down, it became just a little spec on Wall Street. Let’s say you invested directly in the S&P 500 at the end of 1991. In 1995, you would have had a 34.11% return. In 2008, you would have lost 39.23%. You tell me… Does that sound good to you?

Is a Guaranteed Life Investment Different From a Fixed Indexed Annuity?

I once did an experiment and described the Guaranteed Life Investment to a room full of people attending an investment workshop. I told them exactly how it works, much like I’ve done for you in this report. I then asked the question, “How many of you would like to be in that type of investment?” All I could see at that point was a sea of hands shoot up in the air. Every single one of them. The entire room said they found it to be an appealing investment.

I followed up that question by asking, “How many people here like annuities?” Only three hands went up. I then revealed to the room that the investment I had just described, and the one they had unanimously endorsed, was, in fact, a fixed indexed annuity. Crazy, right?

Have you ever heard the saying, “don’t knock it until you try it?” Well, you might be shocked at just how beneficial a fixed indexed annuity could be in your overall retirement plan. I’ve seen people shocked by this before. And, of course, it is very possible that a fixed indexed annuity would not benefit you in ways it benefits others. The only way to find out, though, is to do an analysis.

Set up your free strategy session right here on this page (scroll up—you’ll see a yellow “retirement strategy session” button on the right side of the page), or you can give us a call at 1-352-561-4571! Together, we’ll determine if your overall retirement plan can benefit from the fixed indexed annuity.

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How Do I Reduce, Lower or Minimize Taxes On Social Security?

In 1935, when President Franklin D. Roosevelt signed the Social Security Act into law, it is claimed that he vowed never to tax Social Security Benefits. FDR kept his promise, too, because as long as he was alive, there was no tax imposed on Social Security benefits. But during Ronald Reagan’s presidency, the Social Security Amendments of 1983 changed all of that. Beginning in 1984, if your base income as a single taxpayer was $25,000, or, if you earned more than $32,000 per year as a married couple filing jointly, then up to 50% of your Social Security could be taxed by the Internal Revenue System.

The next tax increase would come with the 1993 budget deal under President Bill Clinton, which raised taxation to up to 85% of benefits for single filers with incomes of more than $34,000, and for couples with annual incomes of $44,000 or more.

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How Can I Maximize My Social Security Benefits?

When I was in junior high school, I decided I would learn to play chess. It was sort of a fad sweeping the eighth grade. I thought the best way to learn the game was to play with another classmate who already knew the game. I figured chess couldn’t be much more complicated than checkers. After all, they were played on the same board. I knew the basic pieces and how they moved. It looked like fun. The other kid slaughtered me. It was checkmate in fewer than 10 moves every time we played – that is, until I bought a little 50-cent book entitled Chess for Beginners at the local news stand and learned that there was something called “strategy” that was involved in this game. Once I understood the rules and strategy, I rocked! Well, that may be overstating it a bit. At least I didn’t get killed so much.

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How Do I Act As My Own Bank? … The 770 Plan!

Albert Einstein was right to call compound interest the eighth wonder of the world. Like the atom, it can accomplish powerful things. Two things are true about compound interest: It works best (a) over time, and (b) if you leave it alone. The concept of the interest earning interest on interest earning interest is the simple reason why the rich get richer. It’s an immutable law of finance.

If you stop and think about it, whether we know it or not, we finance everything we buy. “But wait a minute,” you say. “I pay cash for everything I own.” Really? The cash you pay could be earning interest if you had kept it, couldn’t it? So by forfeiting that potential interest, you essentially financed it, right? If you paid cash, you have to make payments to yourself to get back to where you were before you made the purchase.