Sounds familiar to many people. And, we all ask the same question... “How did time fly by so fast?"  Well, we all had different, and many times similar things, we were dealing with at different times. Think about it.

Age 25

Hey, we can't save for retirement now.  Just out of school, student loans to pay and need a new car.  Plus, time to have some fun.  I have plenty of time to save.

Age 35

We can't save another nickel now.  Growing family, new mortgage, private schools.  We will have plenty of extra money later.  Plenty of time.

Age 45

​Save more for retirement?  Are you kidding?  Have one kid in college and another right behind this one.  Most expensive time in our lives.  When the kids are out of college, we will get a big pay raise, and will start plowing away retirement money then.

Age 55

I know that we should be saving more for retirement, but things didn't work out like we thought.  Got caught in a market sell off, had to start a new job and we are just strapped

Age 65

​"Where did the years go?  We thought that we had plenty of time to save for retirement.  We weren't worried because our 401k’s and our tech stocks were flying. Then boom... a market correction.  Is there anything that we can do now?  We need additional retirement income…

The answer is yes.  You can help your clients establish their own "Personal Pension Plans" and utilize annuities for a portion of that plan. You should contact your clients now to discuss their alternatives. Hopefully your clients stayed safe during the pandemic.  Now, might be time to keep some of their money in a safe place too.

Many Americans are finding themselves in a position where they “want” to retire early or “have” to retire early.  First off, the old concept of retiring at age 65 is not holding true for many.  Also, age 65 is no longer the time when you get full retirement benefits.  That age has increased to over age 66 depending on when you were born. But, there are many factors that determine when a person wants to start taking benefits. 

We know that the amount of monthly payments increase by about 8% per year if one is able to wait until age 70.  But, health issues can make early retirement unavoidable.  Many people can’t keep their jobs till age 70.  Some people might have lost their jobs and have to start taking payments prior to full social security and start around age 62. 

Suffice it to say that here are many  factors that weigh into an individual’s decision.  But, one thing remains true… they need an income that can support their lifestyles.  And, we in the insured products business have options and solutions.  Let’s look at some…

We are all familiar with the split annuity concept.  A person retires prior to receiving social security and doesn’t want to start payments.  They may be waiting for the increased amount at age 70.  So, we provide a SPIA (single premium immediate annuity) to fill the gap prior to the Social Security benefits kicking in.  Maybe we can provide for them an amount that would be equal to a reduced Social Security benefit. The client might be concerned about needing even more money at age 70.  

​So, today the client can purchase a fixed index annuity (FIA) with an income rider.  Let the account grow, and start receiving the payouts at age 70 as well.  There are many solutions in the fixed arena.  I think it would be a smart idea to be speaking with our younger pre-retirees or post-retirees and show them what we can do.  Need help with the plan and illustrations?  Give one of our marketers a call… that is what we are here for.

We are all familiar with the “Rule of 72.”  You know, we can find out how long it will take for an amount of money to double at a certain interest rate.  Example:  if a financial instrument will earn 6%, you divide 6 into 72 and the money will double in 12 years.  Simple… right?  Well, not so fast.  If that annual 6% earnings rate is being taxed every year, it will take longer.  I was recently on a ZOOM and this concept was re-explained to me.  It reminded me of the benefits of tax deferral.  So, how about I get to the end of this commentary now. Yes, an annuity that grows at 6% annually  will double in 12 years.  A taxable investment will not, as taxes have to be paid each year.  So, I am not suggesting that your clients should forgo equity and taxable investments.  I am just pointing out the beauty of this annuity product.  And, I believe it will be more important in the years to come.  Why do I say that?  Please read on. 

There is a change going on in America.  We are printing more money than ever.  And, it looks like it won’t stop.  Maybe it’s a good  time to remind ourselves that the US government is not handing out  “their money.”  They are handing out “our money.”  You see, we all know that our federal government is not building products, making new inventions or making payroll.  We do that as Americans.  But, (as all leaders like to say)… My fellow Americans, you and I must pay for these spending sprees.  Now, I am not here to judge the benefits of any of the programs the government has enacted.  But, just to state, that they must be paid for.  And, tax rates will increase all across the board.  So, therein lies the beauty of tax deferral.

Can I also remind all of us of a great benefit to non-qualified annuities?  There are no required minimum distributions with the non-qualified annuity. What a great place to accumulate money to be passed down (also life insurance).  And, in the FIA, a client can change the allocations inside the product without selling an investment product and paying tax on the gains. Yes, in an annuity, first dollars out are taxable as they would be the gains… after that, it is just a return of principal.  Can I just state one more thing I was reminded of?  Many people have a portion of their portfolios in fixed income?  And, many have that money with a fee based advisor.  I do, and he does a great job.  But, it was pointed out that if a client was earning 1.5% in the fixed income account and paying a 1.5% fee, it was a wash… no gain.  But, what if your clients had a portion of their fixed income account in annuities? No annual fee and a minimum guarantee.  If a MYGA, a gain every year.

So, again, no investment advice given here.  Just advice from an older veteran in the business that has “been to this party before.”  Remind your clients of the beauty of tax deferred growth and the ability to make their own decisions as to when they want to start drawing money from their account.  Next, I will write on our ability to provide a product that can provide an income that they can’t outlive… regardless as to how long they live and also regardless of market fluctuations.  

To say these are unusual times would be an understatement.  My wife and I went to get our vaccine cards laminated.  They might be very important, and the paper they use is pretty thin. And, they are a weird size and don’t fit in most wallets.  So, we went and got our cards laminated.  But, too stiff and big for my wallet.  So I stuck them with my passport , made extra copies and will fold up a paper copy for my wallet.   But, for us that wanted the vaccine, we were happy to get the shots and now have to protect this little piece of paper as it might be important in the future.  So, where am I going with this?  Please read on…

What if we had a retirement card (sort of like Social Security) that showed that our retirement income was protected from financial viruses?  Maybe now is the time to have this conversation with our clients and prospects.  Time to again re-visit their retirement cash flow, their essential and discretionary income needs and show the shortfall.  And, we can provide the “vaccine” that will guarantee the desired amount of money they need at retirement (or during their current retirement).  That vaccine could be an annuity.  Again, all we have to do is ask… “How much do you need… and when do you need it?”  Yes, we are like financial magicians.  We can show them exactly how much to place in the annuity to give them the desired income.  Yes, I know that we can’t magically increase the money they have today.  They may have to reduce some expenses, etc. to live in a comfortable world.  But, we take the mystery and angst out of their lives.  The income, like Social Security, will be there.  So, get your clients vaccinated today from financial viruses.  Oh, there is a problem.  The annuity contact is larger than the Covid-19 card and still won’t fit in their wallets.  But, it could bring about a safe and tranquil retirement.