hOW TO NEvER RUN OUT OF mONEY WITh YOUR IRAs ANd RETIREmENT AccOUNTSBy the time they came to me, they had no idea what to do.
What their broker should have done is ensure that their retirement prin-
cipal was safe from risk, despite what happened in the global market.
Instead, he put their life savings in risky accounts. Those accounts back-
fired in 2008.
That couple wanted to make money in stocks and bonds, which cer-
tainly is not a bad thing. But they did not want to lose everything, which
is nearly what happened. The broker should have known what to risk
and what to keep safe.
Their savings were up for grabs everyday. On dozens of different trad-
ing days, they lost a lot of money. And it continued until they left that
broker and came to me.
WhAt Do I Do DIFFeRentlY?Ask my happy clients in Orange County, California. Many of them have
taken my financial classes, which I teach three times a month. I do near-
ly the same thing for each and every one of my clients. I put their retire-
ment principal where it can receive a certain amount of market growth
while losing none of the principal when the market crashes.
We look to win a safe amount each year. We never lose anything, no
matter how bad things are everywhere else. We do this by putting their
retirement principal in a Fixed Indexed Annuity (FIA), also called hy-
brid annuities. Our goal is not to hit a home run out of the park, hear the
crowd cheer, and make a victory lap. We just want to make it to base, I
like to tell clients, and stay in the game.
By putting their money in a FIA, my clients’ goals are to receive enough
interest to offset inflation. This past decade, most clients were very hap-
py to average 5 to 6%. How do my clients average 6% when everyone
else is losing money? One aspect of the FIA is Annual Reset - when
the Standard & Poor’s 500 is falling, you lose nothing, in exchange for
a cap on the upside. This eliminates the greatest fear of investing for
someone heading into retirement, which is loss of principal.
The worst any client of mine has ever earned in any one-year period
over the past 14 years is a 0% return. There has never been a loss! The
best any client of mine has done in any one year is 22%, but most are