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 

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

FREE Social Security Manual!

The biggest story in Social Security today concerns the large number of baby boomers set to retire over the next 20 years and the relatively smaller younger generations feeding Social Security payroll taxes into the system.

There are strategies you can employ to help reduce the risks of outliving your money.  These strategies may be directly related to when you start taking Social Security and how you should consider positioning assets for a surviving spouse.

Watch my video and request our FREE MANUAL titled: 'The Social Security Decisions' today by calling our office at 877-284-8929.

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 6/2/14

Happy Monday from Income For Life!

We have made a few changes to our weekly e-newsletter.  Check them out!  Plus, we have two new national articles for your review.  Make sure you take a look HERE.

Thanks and make it a great week!


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