The 401(k) Rollover - Ask A Common Sense Question

At Income For Life, we often meet with near-retirees or retirees that have a 401(k) - or other form of Defined Contribution plan - that they are considering rolling into their own personal IRA.

What some do not realize, though, is that the decision of WHEN to move this asset is not nearly as important as the decision of WHERE to move this asset.

Here is what I mean:

• Let's say are are at retirement age and you have a 401(k) plan that has been accumulating (hopefully) for many years that you want to convert into a retirement income plan because you do not have a corporate pension plan to fall back on, so your retirement plan is now on your own shoulders. As you begin to research different firms to help you with this effort, you are 'wooed' by their gourmet dinner events, their mahogany desks and their ability to use fancy financial terms, charts & graphs.

But here is the 'common sense' question to ask them:

• "Is the plan you are offering me guaranteed against market losses - and is my income guaranteed to last my entire life?"

Common sense says this is an important question, correct?  If they cannot answer 'YES' to both - you should walk away.

When you retire, what will you no longer receive?  A paycheck - so it must be replaced.

Would you like it to be guaranteed for LIFE - and protected from stock market losses?  Absolutely.

Would you like to still be able to participate in the market gains, though?  You bet.

Guess what:  You can.  Call my office to discuss your 401(k) rollover - in a common sense way.


Matt Nelson, president and host of Income For Life Radio
877-284-8929 toll free
www.IncomeForLife.org

Income For Life Radio - Listen In! Online Podcasts!

Income For Life Radio is taking the airwaves by storm!

Check it out today at www.IFLRadio.com for past shows!

Have a question that you want answered on the air?

Email it to AskMatt@IFLRadio.com!

Matt Nelson, president and host of Income For Life Radio
877-284-8929 toll free
www.IncomeForLife.org

Investment Advisory Fees - The Cantaloupe Analogy

A fellow national affiliate of Income For Life was recently in my office and offered an analogy about how Investment Advisory fees are similar to paying someone to pick out a cantaloupe for you at a local grocery store.  Here is the story:

• Picture yourself at a local grocery store and you are in the produce section - and you want to purchase a good cantaloupe.  What do you do?  You do what we all do:  You pick one up and shake it a bit.  You smell it.  You maybe even 'knock' on it to try to determine if it is ripe or not.  You continue this process until you find that special cantaloupe that is right for you.

Sound about right?  Me too - every time.

Now, if you are like me, you understand completely that you have NO IDEA if that chosen cantaloupe is a good choice or not until you get home and cut it open.  It very well could be bad inside - but there was absolutely no way to tell while at the grocery store without cutting it open in the store.  Obviously, we do not do that!

Here is the analogy of the fees that an Investment Adviser charges you in your retirement accounts:

• What would you say if a person charged you a fee to pick out a cantaloupe for you at the grocery store?  They might tell you that they have 'expert melon-picking skills' and they might try to dazzle you with grocery produce 'jargon' that makes them look and sound as if they have all the abilities to pick the best melon for you - but do they REALLY have the ability to pick the best melon and know for sure it is a good one without actually cutting into it?

Nope.  They do not.  It is all just a guess.  Just like Investment Advisers do not have a crystal ball to predict the stock markets.  All they can do is dazzle you with financial 'jargon' and do their best to try to market themselves to the public that they have a crystal ball - and hope you will pay them for their 'guesses'.  

If you are currently paying an Investment Adviser to pick stocks for you - and this person could guarantee that they could predict the stock market AT LEAST 51 percent of the time - they would not be working for you.  They would be sitting at home doing it for themselves.  Sad, but true.

If you are over age 50 and you are doing this with your retirement accounts - you are playing with fire.  You wouldn't pay for a 'guess' with a cantaloupe - why pay for a 'guess' with your retirement livelihood?

Matt Nelson, president and host of Income For Life Radio

877-284-8929 toll free

www.IncomeForLife.org

Common Misconceptions About Annuities

At Income For Life LLC, we often hear retirees and near-retirees express their concerns about annuity products. When we dive in a bit deeper, it is typically determined rather quickly that the information they believe to be true is actually false - and they never knew it.  Sad, but true.

Here are a few misconceptions about annuity products that can put to rest some of your concerns - and what the facts actually are:

MYTH: Annuities are investments.
Wrong! Fixed annuities are insurance products which have the ability to guarantee an income stream throughout retirement; they are not investments.

MYTH: You can outlive fixed income annuity payments.
Wrong! Fixed annuities are the best way to solve for longevity risk and be guaranteed an income stream for life.

MYTH: Fixed annuities are not a safe asset class.
Wrong! Insurance companies are regulated by state regulations. Insurance companies must have sufficient assets to make good on their guarantees. There is no loss of principal even when markets decline or the economy falters.

MYTH: Fixed annuities cannot provide lasting income to a surviving spouse or other beneficiary.
Wrong! A spouse, survivor, or other named beneficiary can keep receiving a guaranteed income stream as elected.

MYTH: Annuities have no liquidity options. 

Wrong! Many annuity contracts allow for penalty-free withdrawals and have provisions for emergencies and other contingencies. After a certain point in time, you can receive the full accumulated value of the contract and walk away if plans or circumstances change.

MYTH: Annuities cannot provide a reasonable rate of return.
Wrong! Due to principal staying intact, interest, and the power of belonging to an insurance pool, there’s a solid rate of return in a fixed annuity.

MYTH: A substantial portion of retirement income should be longevity insured.

CORRECT! Up to 75% of total wealth can be justified, under a variety of methods, to be longevity insured, which implies 75% of desired retirement income.


Matt Nelson, president and host of Income For Life Radio

877-284-8929 Toll Free
www.IncomeForLife.org

The Math of Rebounds

What is the future of your retirement?  It just might shock you (or maybe not, unfortunately) that the stock market rebound needed to get back to even after a significant loss is much higher than the loss itself - and each of these market losses were all 100% out of our control.  These events were due to actions of others, yet each one greatly effected your investments.  

Here is what I mean:

• 2001:  Enron collapses; market falls -12.7%.  Rebound needed is 14.6%
• 2002:  WorldCom collapses;  market falls -10.0%.  Rebound needed is 11.1%
• 2003:  Martha Stewart indicted;  market falls -21.3%.  Rebound needed is 27.1%
• 2008:  Bernie Madoff arrested; market falls -35.6%.  Rebound needed is 55.3%.

These figures are based on the market values of the S&P 500 index and these figures represent amount of recovery needed after a downturn in the market.

Do you want your retirement to be subject to market downturns that you have absolutely no control over?  Neither do we.  Give our office a call to learn how to avoid this from happening again - because you and I both know it will.

Matt Nelson, president and host of Income For Life Radio

877-284-8929 toll free

www.IncomeForLife.org

What Happens When The Federal Reserve Raises Rates?

There is an interesting article posted today on USA Today that lines up with exactly our views regarding the Federal Reserve and the stock markets.

Here it is: Fed Rate Shift Could Spook Markets

Ironically, we discussed this issue on Income For Life Radio recently.  Go check it out at www.IFLRadio.com as we discuss our views on The Federal Reserve - and what is coming soon.


Matt Nelson, president and host of Income For Life Radio
Income For Life LLC
877-284-8929 toll free
www.IncomeForLife.org

IFL Radio - Why It Matters

What does a cat named Orlando and a bunch of monkeys kidnapped from a local zoo have to do with stock-picking skills?  You might be shocked.

Listen to our radio podcast titled IFL Radio - Why It Matters to find out.  You simply cannot make this stuff up...


Matt Nelson, president and host of Income For Life Radio
877-284-8929 toll free
www.IncomeForLife.org