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

IFL Radio podcast - why a retirement specialist is needed

Income For Life Radio's most recent podcast is now available for you!  Simply click on the link below to listen in!

IFL Radio - Why A Retirement Specialist Is Needed


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

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.

2030: The Year Retirement Ends, courtesy of Time Magazine

(TIME Magazine, June 30 2014 issue) Public pensions are underfunded. Fewer than half of all private-sector workers enroll in a formal savings plan, and Social Security may not exist in it's current form when it's time for you to stop working.

More than half her retirement income comes from Social Security. When you factor in health care spending, she’ll be living on only about 41% of the average national wage. Despite her best efforts to work and save, our Gen X retiree will have trouble maintaining her standard of living. She won’t be alone: the Center for Retirement Research at Boston College estimates that 50% of American retirees will be in the same boat.

Boomers scrambling to get by on a minimal income. Gen X-ers who can’t afford to stop working. Millennials staring at a bleak financial future. This is the retirement apocalypse coming at us fast–unless we do something about it now. As with other big, slow-moving crises (climate change, health care, the quality of education), it’s difficult to create a sense of urgency over retirement security. But in the past few years, the financial meltdown and its aftermath have thrown the problem into sharper relief. Now, in a retirement landscape that has witnessed few big innovations since the Reagan Administration and the rise of the 401(k) account, we’re suddenly seeing a range of new ideas.

Regardless of the eventual solution, few dispute that we’re on a dire course at present. Experts estimate that half of Americans are at risk of becoming economically insecure in retirement. Our system is in desperate need of a fix. “We’re facing a tsunami,” says Senator Tom Harkin, a Democrat from Iowa who has proposed his own program. “And we’ve got to deal with it – now.”

Read the entire article HERE and call our team of retirement income planning experts to learn more.

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.

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