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

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

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 - The Federal Reserve

Listen to our podcast discussing our thoughts on the Federal Reserve.  

What is going on?  Why did Bernanke leave his post - and what is Janet Yellen's primary goal?

Our thoughts are here, so take a listen!


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

IFL Radio - 10 Things To Know When Planning Your Retirement Income

Last week's Income For Life Radio show is here!  Learn how to order your free copy of our manual titled - '10 Things To Know When Planning Your Retirement Income'.

Also, listen to our announcements, as well as our answers to the weekly question sent to AskMatt@IFLRadio.com.

Click HERE to listen to the show!


Matt Nelson, president and host of Income For Life Radio
Income For Life LLC
877-284-8929
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

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

Hope So vs Know So

What does it take to be confident in retirement?  Will your nest egg last?  Is it enough?  What about an unforseen event popping up?  Will you have enough for the extra things, such as grandkids, travel and relaxation?

It is all about 'Hope So' vs 'Know So'.  Here is the difference between the two:

• Hope So:  You have no true plan for retirement.  You are hoping that things go your way and you are at the mercy of others.  You have no control over what happens and you have no guarantees.  You are hopeful, but not truly confident.
• Know So:  You have a guaranteed plan for retirement.  You are in control.  You have an income that lasts as long as you do.  You have a plan that is in writing that is contractually guaranteed.  You have the peace of mind of knowing that your retirement income will always be there for you - no matter what.

Now, if you had a choice:  Which would you choose?  It is pretty obvious.  Call our office to learn how to switch from 'Hope So' to 'Know So'.  Consultations are free of charge and can be handled over the phone.

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

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.

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

The Boiling Frog Mentality

It has been said that if you place a frog into a pot of boiling water, it will immediately determine that the water is dangerous and will jump out.  But, if you place the same frog in a pot of room temperature water and gradually bring the water to a boil, the frog will not jump out and will eventually come to it's demise.

Unfortunately, I have met with many retirees or near-retirees that have the same mentality.  They have the large majority of their retirement nest egg invested in the stock markets and are at risk of 'boiling', but they do not jump out of the water - even when they know it is dangerous to stay there at this time in their lives.  Retirement time is not the time when you should stay in the water - whether it heats up or not.

Why is this?  There are several national studies that do their best to define the thought processes of those approaching retirement and the determinations for why retirees do not make the 'jump' to safety is:

1. Lack of Education
2. Fear of Change
3. Relationships

Simply put, retirees do not have the educational resources readily available to them and are often tugged & pulled in several different ways, so the fear of change becomes an overriding factor.  Some also feel that they will 'hurt the feelings' of their existing adviser of they move their accounts into a safer asset class - and are sometimes even expressed this by their adviser.

My thought is this:

1. Education is indeed available, but you have to know what to ask.
2. Change is inevitable.  You have to make the 'mental shift' from accumulation to distribution.
3. Relationships will not pay your bills or keep you afloat financially if the markets go bad and you lose your nest egg - and your adviser will not pay your bills for you - so you have to do what's best for you.  After all, is it your money, or your adviser's money?

Don't be the boiled frog.  Call our office to learn how to 'jump' to safety.

Matt Nelson, president

Income For Life LLC

877-284-8929 toll free

www.IncomeForLife.org

How to create a 7% retirement income in a 1% Market

Planning for retirement today is much different than it was five or ten years ago.  The stock market rises and plummets in reaction to events a half a world away.  People are living longer than ever, meaning their money needs to last forever.  Many retirement plans are simply no longer suitable for today's volatile ecomomic conditions.

Call our office today at 877-284-8929 to learn our strategies of how to create a 7% income in a 1% market.  Whether you are planning for retirement or are already retired, this information is vital to you.  No cost.  No obligation.  Informational only.


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

The Retirement Shift

Retirement is a scary process, both mentally and physically.  It is inevitable.  Anxiety will head your way...decisions will need to be made...and you will be pulled from every direction possible.  

The media and marketing types will hit you like a ton of bricks...your mailbox will be full every day.  

You will have so much information thrown at you that you will not have enough time in the day to even look through it, let alone process it.

I call this The Retirement Shift.  Watch my video to learn more about this process and give my team a call if you want to discuss this further.  You are not alone...we are here to help.

Matt Nelson, president

Income For Life LLC

877-284-8929 Toll Free

www.IncomeForLife.org