Making Up Losses with Insurance Co. Guarantees!

Over the past year and a half retirees have lost a tremendous percentage of their net worth. These losses often have a significant impact on their quality of life.

Today I'm going to share with you a way that I assist my clients in making up their losses in the market using insurance company guarantees.

Combine Index Annuities with Growth Accounts

Imagine I am talking to a client with a $500,000 portfolio. They have $300,000 in stocks and mutual funds and $200,000 in fixed income or CD's. Given their current situation, if the market goes up (which is what they are hoping for), only $300,000 in stocks will participate. If the market goes down, only $200,000 is protected.

Compare that to an indexed annuity. If the market goes up, depending on the crediting strategy, up to 100% of the account participates. If the market goes down, 100% is protected. One could argue that utilizing an indexed annuity 100% is a better solution for this client. However, I don't like to have my clients putting 100% of their money in one place.

Now, what if we put a portion in an indexed annuity and the rest in a growth account. It might look like this: $400,000 in the indexed annuity and $100,000 in a growth account. You would then have $400,000 protected vs. $200,000. You would then have all $500,000 participating if the market grows vs. $300,000 now.

Is it perfect? Probably Not. But remember, imperfect action is better than no action at all!