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

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

The Goal Of Retirement - The Kindergarten Rules

I am a firm believer that all of life's important things were learned when we were in kindergarten.  

Think about that for a minute:  Isn't it true?  Not only did we begin to learn the basics of education, but we also began to learn how to rationalize.  We learned how to share.  We learned how to communicate properly.  We began to learn a bit about 'common sense'.  This all began in kindergarten.

We also often tell each other:  "If you want an honest answer to a question, go ask a child."  Agreed?  I can think of many times this has been proven to be true with my own kids.  Some are a bit embarrassing, but all were true.

So, I did.  I asked a six year old what he thought retirement is.

His answer:  "That is when you don't work anymore, just like grandma and grandpa."

"You are correct", I said, "But what happens if you run out of money?"

He thought for a second and answered:  "Then you are not retired anymore."

Good answer.  Very good answer.

I then asked him, "Do you think it is important to always have money when you retire?"

His answer:  "DUH!", as he rolled his eyes at me.

It must be nice to not have to hassle with the emotional side of decision-making and simply look at something for what it is - even at age six.  

Wouldn't it be nice if adults could do this, too?  Then again, why don't we, even when the answer is so simple?

If you want to STAY retired, you have to have a retirement plan that keeps paying you a paycheck for the rest of your life.  If you do not have this, then you are -according to a kindergarten child - planning to go back to work someday and just might end up with your own "DUH!" moment.

Let us show you how to STAY retired today and keep you away from "DUH!".

Matt Nelson, president

Income For Life LLC

877-284-8929 toll free

www.IncomeForLife.org

Bicycle Tires vs Truck Tires - An Annuity Comparison

Picture this:  You are a truck driver, sitting at a coffee shop having a discussion with someone that tells you - with a straight face - that you should not purchase tires for your truck because all tires explode.

Let that sink in for a minute.  Do truck tires explode?  Sometimes.  I have driven down the highway many, many times and I see tire pieces on the road from when one did indeed explode - and I have been driving next to a truck when one blew out, sending tire 'shrapnel' across the highway in large, rubber pieces.  

Now, do we all still have tires on our vehicles right now, knowing that they could explode?  Yes.  Of course.  I do.  So do you.  But, according to your coffee discussion, you should not have tires on your truck because they explode.  Ridiculous, right?

As you continue your talk over coffee with your new friend, you soon realize that this person is basing his assumptions on bicycle tires for why you shouldn't have tires on your truck - and his reasons for this conclusion is because he is of the view that all tires are the same because they all are made of rubber, they all travel down the road and they all hold air in them.  
HUH?!  What?!  Really?!  You politely finish your coffee and leave - hoping this person doesn't follow you outside because he has to be crazy.  This person's logic makes sense on a basic level (tires are indeed made of rubber, they hold air and they can explode) but his belief of 'they are all the same' is nuts.  How could anyone use that thought process - and why on Earth would anyone listen to him?

Annuity products are no different - and unfortunately most are indeed listening.  Annuity plans come in all shapes and sizes - to the tune of nearly 300,000 choices across the nation today - just like tires do.  Unfortunately, there are some 'crazy coffee shop people' out there that will continually do their best to lump annuities into one category instead of distinguishing the different types - and these people happen to have deep enough pockets to spend millions of dollars on the crazy idea that all annuity products are the same - and most believe it.  

Here is an example of marketing bias:  I am of the belief that if enough money was spent on a marketing idea for a particular steel hammer that, upon accidentally hitting your thumb, it would not hurt - there would be people out there that would think it is true and would purchase the hammer.  

Why?  Because they saw it on TV, heard it on the radio - so it must be true.  Sad, but very true.  Think about it for a bit.  You know this is correct.  Throw enough money at a particular idea and you could sell 'steel hammers that won't hurt your thumb when you hit it!' - and people would buy it.  UGH... 

When it comes to retirement planning, these type of people have a name:  They are called WALL STREET.  Sadly, there are certain Wall Street folks that are constantly trying to tell you that 'bicycle tires' are the same as 'truck tires' - and they have the marketing money to sell this ridiculous thought to you.

Why does Wall Street insist on lumping all annuities together into one category?  The reasons are very simple.  Call my office to find out and you will be shocked at the outcomes - because it is just as ridiculous as comparing bicycle tires with truck tires.

Matt Nelson, president

Income For Life LLC

877-284-8929 toll free

www.IncomeForLife.org  

Reactive vs Proactive - A Retirement Planning View

What does it mean to be "reactive", compared to "proactive" in retirement planning?

The word “reactive” implies that you don’t have the initiative. You let the events set the agenda. You’re tossed and turned, so to speak, by the tides of life. Each new wave catches you by surprise. Huffing and puffing, you scramble to react to it in order to just stay afloat.

In contrast, the image we associate with “proactive” is one of grace under stress. To stay with the previous analogy, let’s say you’re in choppy waters. Now, you look more at ease. It’s not just that you anticipate the waves. You’re in tune with them. You’re not desperately trying to escape them; you’re dancing with them.

It would be great to dance with the rhythm of life, using the ebb and flow of events as a source of energy. But is this only possible to those people who are endowed with a proactive attitude (or, maybe, a “proactive gene”)?

I believe that being proactive is not a mysterious quality that we have, or don’t have. It is a way of dealing with things, that we can develop and strengthen.

So how does this apply to retirement planning, you ask?  EVERYTHING.  So many times I meet with a retiree that is 'reactive', meaning they only make their retirement planning decisions based on past events - and then try their best to react to them.

Why is this?  Because typically that is how their advice is coming to them from their current adviser:  reacting to past events, thinking the future can be controlled.

Why do this?  Being reactive is saying "I am at the mercy of my surroundings", while being proactive is saying "I control my own destiny."  

At Income For Life, my team takes the proactive approach.  We do not sit around and hope that good things will happen - we make it happen so your retirement destiny is YOURS.

Matt Nelson, president

Income For Life LLC

877.282.8929 toll free

www.IncomeForLife.org

Retirement Income Planning - An Elementary Math Equation

Our team at Income For Life LLC is of the view that proper retirement income planning is a simple elementary math equation that anyone can do on their own. 

The problem – and confusion – is not with the equation. The confusion lies in where the numbers line up inside the equation. 

You can have the easiest math equation possible, but if you do not know where the numbers line up inside the equation, the problem becomes much more difficult – if not impossible – to solve.

Our Goal: To simplify your retirement math equation for you by using the same assumptions that are expressed to you from Wall Street media – but we are going to present these assumptions in a way that you have not seen before to validate a simple fact: that losses hurt much more than gains help.

Request our PDF for your own copy of Retirement Income Planning - An Elementary Math Equation today.

Matt Nelson, president

Income For Life LLC

877-284-8929 toll free

www.IncomeForLife.org

Retirement Income.  Simplified.

The Accumulator vs The Distributor

What is a 'Retirement Accumulator' compared to a 'Retirement Distributor' - and why does it matter?  Once you understand the difference, it will make sense.  Here we go.

When retirees or near retirees come into my office to discuss their options for proper retirement income planning, the first thing I ask is "who is your Retirement Distributor?"  Typically, the person across my table is uncertain what we mean, so we explain that the distributor is the person responsible for the distribution of your retirement assets to you so that your money lasts as long as you do.

The retiree across the table understands, nods and typically says, "We have a person at (fill in the blank) that we have worked with for some time now."  As we discuss further, we then come to the agreement that this person is typically NOT a retirement distributor and is normally the retirement accumulator, in which the two are apples & oranges when it comes to retirement income planning.  Here are the differences between the two:

• The accumulator is typically the person responsible for accumulating assets for you - usually in the stock markets.  This person's sole responsibility is to accumulate as much money for you as possible so that when you retire, you have a strong nest egg to fall back on.  This could come at the cost of both risk and fees, but is necessary while at a younger age (typically up to age 50-55).

• The distributor is typically the person that you begin to utilize when you approach retirement age because the distributor uses those accumulated assets to build a retirement income plan for you that will last as long as you do.  This person's responsibility is PRESERVATION and DISTRIBUTION of those assets, as opposed to ACCUMULATION of those assets.  This is the time when you want risk and fees to be at the minimum (typically age 50-55 and older).

• Can the accumulator also be the distributor?  Sometimes, yes.  
• Is it rare that this person can wear both hats successfully?  Unfortunately, Yes.  
• Do most retirees understand the differences between the two?  Typically, no.

When a retiree approaches retirement age, most need to look for a strong Retirement Distributor that understands that in retirement, the return OF your money is more important than the return ON your money.

You have worked hard for 40 years to accumulate your retirement accounts.  Why leave it in a place where you could potentially lose it all inside 40 days - right at the time when you need it the most?

We agree.  Call my team of distributors today to learn more.

Matt Nelson, president

Income For Life LLC

877-284-8929 toll free

www.IncomeForLife.org

Retirement Income.  Simplified.

The Chiropractor Stigma - The Fear Of The Unknown

Today my wife had to go to a chiropractor, so I decided to tag along because of how many times my wife had told me how this 'back guy', as I called him, was helping her so much.  I reluctantly went with her to meet with this person to see what all the talk was about and to determine for myself if this guy was indeed worth my time.  My wife kept telling me, "You have to go because he will change your mind."  So, I reluctantly go with her.

As I sat and listened - and watched - I determined very quickly that this person was not only a professional at his craft, but he was very good.  He explained things very well in a way I could understand, he knew exactly what he was doing at all times and within a few minutes he had my wife back into shape, feeling better and without pain.

As I sat there, I began to realize the similarities between a chiropractor and my way of using insurance products for retirement income planning.  It sounds strange, I know, but the similarities are glaring.  Neither one of us are 'flashy'.  Neither one of us offer anything 'ground-breaking'.  Neither one of us offer something that is 'state of the art'.  All we both do is provide positive results - period.

A lot of retirees come into my office and say the exact same thing my wife told the chiropractor:  "Just don't hurt me."  We hear this all the time in our Income For Life offices because the #1 concern in America today for retirees is SAFETY OF THEIR RETIREMENT INCOME.  

Simply put:  Just don't hurt me.  Ironically, this is exactly what the Insurance Way does for retirement planning.

95% of all corporate pension plans are gone.  Some are still recovering from the devastation of the financial crisis of 2008 - and most are scared.  They are afraid of the unknown.  They are not too sure about the Insurance Way for retirement income planning and the fear of the unknown is a frightening venture - similar to my experience at the chiropractor's office today.

But, after a bit of education and some common-sense discussion, it came pretty clear to me that his methods work - just like the Insurance Way of retirement planning.  IT JUST WORKS.  No flash; just positive results.

Don't let the fear of the unknown keep you from educating yourself about the Insurance Way of retirement income planning because you just might have your eyes opened to a new way of thinking - and it has been in right in front of you for years.


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

The Sports Car vs The Mini Van

When we sit down with our Income For Life clients that are either close to retirement or are already in retirement, we like to describe annuity products vs the stock market products with an analogy of the Sports Car vs the Mini Van - and things tend to then become much more clear.  Here it is:

When you were younger, maybe you or someone you knew owned a sports car.  It was a fun car.  It was a two-seater, it had a fast 5-speed manual engine that could blow the doors off of any other car on the  street.  It looked great, you looked great in it and it was a lot of fun to drive.

But, once you met that special someone and you decide to settle down to start a family, one of the first things that is typically traded in is that sports car, normally for the mini-van or SUV.  Basically, something that is safer and can haul kids around in.  It has more room, offers better gas mileage, it is safety-rated - AND REALLY BORING.  

You know what I mean:  A decision was made that you now need something more practical, given the new changes in your lives.  The mini-van doesn't go 0 to 60 in 3.9 seconds and can't chirp the tires in second gear, but it will get a carload of kids to soccer practice safely and will get the family to grandma & grandma's house over in the next state comfortably without breaking the bank account in gas costs, the kids can watch a movie in the back and there is plenty of room for everyone.

It is important for you to know that this trade-in from the sports car to the mini-van does not make the sports car manufacturers BAD or WRONG - you just simply out-grew it.  You out-aged it.  You got to a new point in your life where the sports car benefits were simply no longer the best thing for you.

This is exactly why annuities are here for retirees.  Annuities are the 'mini-van' of the retirement world.  Annuities are the safe, dependable option for retirees because of the guarantees and the ability to provide lifetime income.  They are not fancy.  The are actually pretty dull (as Benjamin Franklin and Babe Ruth both said:  'Annuities are boring, just as we like them.').  But what they offer is dependability, safety and confidence - and they are the ONLY retirement product that can offer a lifetime income stream through retirement.  Neither the banks or Wall Street have this option available to you.  That is invaluable.  Peace of mind is priceless, agreed?

In our opinion, the stock market is the 'sports car'.  Enjoy it while you can.  It is great for younger ages when risk is furthest from your mind and you still have time on your side, but the markets are not as practical when the need for guarantees and safety are your primary goal - and when you are close to retirement age and time is no longer on your side.

With this said:  What would you say if you went into the auto dealer to trade in that sports car for the mini-van and you explain why you are doing it (eg: starting a family, need something more practical to haul kids around, etc) and the dealer tells you:  "No!  Don't do it.  You are crazy.  The sports car is perfect for what you now need."

How fast would you run out of there?  Me too.


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

Mondays with Matt | News From Income For Life e-newsletter 6/9/14

Happy Monday to you!  Enjoy our weekly newsletter by clicking HERE!

Thank you for reading and make it a great week.


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

Retirement Income Planning - The Lost Casino

Picture this:  You are in Las Vegas.  It is middle of the afternoon and you are off the Vegas strip and are wandering through the 'old' casinos.  You know, the ones that no one goes to anymore because they are boring, the are 'old', they are not flashy at all.  They are the 'lost casinos'.

You make your way into one and find a line of people trying to get on one particular table game.  It is Blackjack - and the line is nearly out the door.  You ask a person in line "What's the big deal?  It's just Blackjack.  Why is there a line to this one when there are other tables and other casinos?"  The person looks at you, chuckles a bit, and says, "I will tell you, because you remind me of myself before I found out about it."  You are confused, but you are curious, so you agree to listen.

"This is a special table because you cannot lose at it", he says.  "But there are two things you must know.  The first is that you do not get all the winnings if you win a hand, but you get most of them and once you win a hand, you can never lose the winnings.  The other is that you must play at least ten hands so you don't get a penalty for leaving the table early.  The casino also gives you a bonus to get things started and you get to keep the entire thing if you play all ten hands - winnings and bonus.  If you play all ten hands and lose every time, then the worst thing that can happen is that you walk away with all of your original amount, plus the bonus, but you get to share in the winnings with the casino when you win."

You look at him completely startled and very pessimistic.  You have never heard of such a thing and you simply cannot imagine such a table game could exist, so you start asking more questions.  You soon find out that the way the casino makes money is because the players do not get all the winnings when they win and anyone that leaves before playing all ten hands is penalized, but you quickly calulate that the trade-off for never losing, yet still get to share in the winnings, outweighs this ten-fold.

As you ask more questions, the person becomes irritated and tells you, "If you don't want to play, then simply step out of line."  You say, "I understand, but if you don't mind, I would like to ask you one more question."  The person agrees so you ask, "If this table is indeed as you say it is, then why is it way back here in the old casinos and not up front on the main strip with all the new casinos?  This table would make a killing if more people knew about it!"

The person responds, "That is because it has been here for a long time and this casino will stay right here, just as it has been for decades.  It is not their fault that you did not know about it until now and it is important for you to understand that the new, flashy main strip casinos do not want you to know they are here and they will do their best to keep this one hidden from you."  

This makes complete sense, so you stay and you play - and you win, and win, and don't lose, and win and don't lose, and win.  You play all ten hands and you look down to see that you nearly doubled your original amount.  The person next to you did not win a single hand, yet he was extremely happy because he still walked away with all of his original amount plus the casino bonus amount, so he is also happy because he didn't lose a single dollar.

Now, what if this concept was available to retirees for retirement purposes?  

Guess what:  It is.  Welcome to the game.


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