The need for a rainy day fund is never more important than once you are at or near retirement. When you are living off your investments, and something unexpected comes up – your house needs a new roof, you just have to go to Hawaii – where are you going to take the money from?
It’s also important to avoid direct exposure to market risk once you are ten or fewer years away from the time of retirement. For the purposes of this opportunity, we are speaking of the money you have set aside in what you believe to be a safe place.
✔ This isn’t money you need right now for your retirement income.
✔ It might be money that you want to have available at some point in the future, especially if you are married and have a spouse you want to protect.
✔ It might be inheritance money you’re looking to put someplace where it won’t be exposed to market loss.
✔ It might be money that you want to earn a better rate of return than what’s being offered by traditional “safe” money options.
Until now, you’ve basically had only three choices about what to do with this money, and all of them have their drawbacks.
Option One: A bank CD.
Certificates of Deposits are an investment in time. You choose a bank (insured by the FDIC) and a period of time (anywhere from six months to five years) during which you will NOT spend a penny. The bank accepts your deposit and gives you in return a fixed rate. The rates as of September 2016 are pretty dismal:
- 1-year CD yields: 0.3%
- 5-year CD yields: 0.8%
Not only that, but you can’t access your money until the CD matures, and if you do, there may be hefty penalties and fees to pay.
Pros: You won’t lose your principal and the bank ensures the funds.
Cons: The rates stink, you can’t access your money, there are penalties for early withdrawal and you are taxed on the gains even if you don’t spend the money.
Option Two: Savings Accounts.
Whether it’s a money market savings account or a savings account from your local bank, your interest rate will be measly – the national average as of 2016 is .06% APY – in exchange for easy access to cash. Money market accounts typically offer (slightly) higher rates for larger amounts of money, and your deposits are FDIC insured.
Pros: Easy access to your money, the security of FDIC insured, and there are no surrender charges.
Cons: Seriously measly rates– which means you are basically earning nothing. You are also taxed on any interest earned whether or not you spend the money.
Option Three: An Indexed Annuity
Annuities are designed to pay out an annual income, but some of the newer fixed index options offer an attractive place to park rainy day funds. With the purchase of a death benefit rider, for example, you can access market-linked growth that allows your money to step-up or grow similar to the way your Social Security benefit grows. Every year you don’t spend the money, it grows even more.
Typically, annuities earn higher rates than bank CDs, but fixed indexed annuities have capped rates. That means you have the potential to capture some, but not all, of the market gains. We are currently seeing caps for fixed indexed annuities that average around 4%. However, through our exhaustive research, we’ve recently come across two that have higher caps. Not many people know about them, so if income is on your mind, give us a call.
Pros: You can usually at least keep up with the rate of inflation, currently at 3.22%, and your returns are NOT taxed until you actually spend the money. An annuity can also guarantee income payments for life, with guarantees based on the underlying claims-paying ability of the insurance company.
Cons: Most annuities are long-term commitments that charge surrender fees and penalties if you need to take out your money, and access to free liquidity is usually limited to 10% of the deposit.
TODAY’S NEW SUPER-HERO: Who is this Masked Marvel?
There is one particular A+ rated insurance company that is offering an indexed product with some of the most attractive terms we’ve seen in a LONG time. This investment vehicle works much like a fixed indexed annuity in that it’s linked to a market index, so when it rains (AKA – when the market falls) you don’t get wet! But there are three significant differences:
- It is fully liquid from DAY ONE. That’s right – no surrender charges, no surrender periods, no early withdrawal fees. Yowza!
- The caps on the gains are significantly HIGHER. Instead of the 4% offered by the average indexed annuity, the current cap as of today is at 11.5%. PLEASE be aware that the cap rates have been going down since this product was first introduced. You want to get in on this while they are still in the double-digits. If you already get why this is such a big deal, get thee to one of our advisors! You can sign up HERE and see if you qualify.
- This indexing product also allows you to leverage your money for your beneficiaries. Every dollar you put into this investment is magnified, so if you’re worried about the income needs of your spouse, for example, this option might just be super-duper.
Like most indexed products, you’ll have the choice of different investment options. This product gives you a 3% back-stop, PLUS your gains are locked-in every year so you can’t lose money.
That means even when the market takes a hit, that 3% backstop, less any fees, means you can usually count on earning at least 1 to 2 percent even during the bad years. During the good years, your cap (as of September 2016) is at 11.5%.
Pros: You get the upside potential of returns capped at a11.5% with the safety of no market downside and a 3% floor; 100% liquidity from day one; no surrender charges; returns are NOT taxed until you spend the money. You also have access to a long-term care benefit and your death benefit may be more than triple your initial investment if you qualify. Any money paid out to your loved ones is tax-free and the benefits are backed by the claims paying strength of an A+ rated insurance company. (Phewf – that was a long list!)
Cons: To get in on this investment, you need to have non-qualified funds and relatively good health, and processing could take as long as six to 10 weeks. (Find out if YOU qualify.)
This is NOT an annuity, so it may not be right for someone who needs to generate immediate income from their money. To find out if this incredible deal is right for you, give us a call at (888) 440-2468 or fill out this secure and simple form we’ll give you our best advice, no strings attached, no pulled punches, no kidding.
During these days of low-interest rates and high market volatility, opportunities like these are rare. We’re so excited about this product, we want to share the news with as many people as possible.If you know someone who might benefit from this, please, pass this article on