Category Archives: Annuities

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New QLAC Ruling Can Reduce Your Taxes in Retirement

QLAC, Longevity Annuity, Qualified Longevity Annuity Contract

This is how Investopedia.com defines a longevity annuity:

“As more people retire earlier and live longer, there is a growing concern about having sufficient income to span what may be a retirement period lasting 30 years or more. Longevity annuities guarantee that you do not outlive your retirement benefits. The insurance company agrees, in return for the premium you invest, to pay a periodic income amount for the rest of your life, starting from a designated post-retirement age.”

A great benefit of owning a longevity annuity is that the cost you pay upfront is much lower than other annuities whose payments begin right away. They also provide people with the reassurance that they will have income as they get older, which is a huge plus since today’s average life expectancy has increased…

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What Happens if an Insurance Company Fails?

When people consider purchasing an annuity, they often question the safety of insurance companies and what happens if they fail. Though it is an extremely rare occurrence, it’s a legitimate concern. You want to know that your money is protected and will always be there.

The problem is that people don’t analyze annuities from every angle, thus resulting in a false representation of annuities and the institutions that provide them (insurance companies).

The truth is, as a retiree, insurance companies are almost always a better place to put your money than banks. Banks are more commercially represented, thus leading people to believe they are the safest and most reliable place to put your money. Because of this, banks are many people’s “go-to” option. You can read more about the difference between banks and insurance companies here.

However, many people don’t realize that this is actually a misrepresentation and banks aren’t always the safest place to put your money. This is especially true in retirement.

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4 Retirement Rules You Need to Stop Believing

When it comes time to retire, there are a lot of important decisions to make. These decisions can be hard to make with so many “rules” that seem to change on a consistent basis. Unfortunately, that is the world in which we live. Things are constantly evolving and changing, and the same is true when it comes to retirement. What was once true for your parents may not be true for you.

For example, it is more likely than not that you will not be retiring with a traditional pension. The days of being able to count on income from a pension are long gone, as employers today rarely provide pensions to their employees. While there are ways today to replace the loss of a pension, the fact of the matter is you can’t count on a pension from your employer like your parents could. Therefore, the rules have changed and you have to work around it.

Here are 4 more rules you need to STOP following when planning for retirement today:

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Florida Can Be One of the Best States to Own an Annuity

I’m not just saying that because I live in Florida and it happens to be one of my favorite states. Florida really can be one of the best states to own an annuity! It is one of the few states where annuities can help provide protection from lawsuits and creditors. Florida has certain laws that help protect your annuities and life insurance assets. Because of this, many people in Florida place their assets inside of annuities and/or life insurance, because of the asset protection they can provide.

To take asset protection in Florida even a step further, not only is there no state income tax, but also if you pay your house off in full it is better protected under Florida law. Once your house is paid off, you can choose to put your non-qualified assets into annuities and/or life insurance, thus making it so that everything is better protected!

You see, Florida provides much more than just sunshine and waves!

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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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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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What Types Of Annuities Are Available?

Here is a truth about annuities that is neither self-evident nor widely understood – not all annuities are created equal.  In fact, I sometimes wish there was another word for this financial instrument because it so misunderstood by so many.

Originally, an annuity simply meant an annual payment.  The Latin word for year is Annus, from which we get such words as annual and per annum.  In ancient Rome, soldiers were given an annuity, or an annual salary, when they retired from the military.  British businessmen developed life expectancy tables in the sixteenth century and came up with contracts that would allow private individuals to create their own annuities, or lifetime yearly payments.  Pay a premium to an insurance company now in return for a yearly stipend later on in life. Since then the basic idea of annuities have metamorphosed into financial instruments that perform all manner of functions along that basic theme.

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How Should I Invest My Money In Retirement?

For a state that receives 58 inches of rain every year, Florida, the state where I live, may seem to be impervious to drought.  But 2006-2007 were the driest back-to-back calendar years Florida has experienced, based on data dating back to 1932.  Weather records since 1900 reveals that in every decade there has been at least one severe and widespread drought somewhere within Florida.