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High Income Tax Strategies with Low-Cost Variable Annuities

Jeremy Reif

In the technologically advanced age that we live in, why does every major insurance company have their advisor base-peddling their costly products? There are other options that cost significantly less, have better investment options, more investment options, no surrender penalties, and no trade costs. Then why is it almost never brought up in conversation by financial advisors? These large insurance companies don’t want the consumer to know the direction our industry is heading — fee-based. There are several fee-based annuities available. They have been gaining...

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The Role of Index Annuities in Financial Planning

Jim Heafner

What role do index annuities play in financial planning? Can they provide growth or just income? First, let’s address index annuity growth versus market growth. Since 1995, some of the better index annuities have historically averaged 4 to 5%.1 Many would dismiss this growth, compared to the stock market’s “higher returns.” The disconnect is that we often focus solely on actual market returns, pointing to the S&P or Dow during good market performance periods only, rather than focusing on actual return performance in an investor’s...

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Finding an answer to the CD interest crisis fixed annuity vs. CD’s

Henry Monahan

A co-worker once told me the CD didn’t stand for certificate of deposit anymore, it stood for certificate of disappointment. For the past 7 years, the United States has been in a historically low interest rate environment. For many retirees, who are accustomed to supplementing their income with their certificate of deposit interest, the lower interest rates made it necessary to look elsewhere for safe income while protecting principal. As of April 22, 2016, the most competitive 5-year CD rates were around 2.1% to 2.2%....

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4 Essentials Every Retirement Plan Should Consider

John Gill

A mere six years after one of the most devastating recessions (2008) in U.S. history, which destroyed many Americans’ retirement plans, I frequently saw new clients who had forgotten about the losses their portfolios took during the early 2000s. I believe it’s important not to forget what a 20, 30, or 40 percent loss feels like in your portfolio. Why? Because another market loss can easily occur during your retirement years. When you enter retirement and begin withdrawing income to live on and not simply...

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Why the Social Security Administration Can’t Help You With Your Benefits

Sam Liang

The Social Security Administration (SSA) can’t help you with your Social Security benefits. That sounds funny, I know, but they can’t. What I mean is that they can’t help you put a plan in place to maximize your benefits. An article in last year’s Wall Street Journal said it best: “The Social Security isn’t your financial advisor.”1 Everyday, 182,000 people visit an SSA office. They field 445,000 phone calls daily. In 2014, they received 17 million applications just for new and replacement cards. 59 million...

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RMDs — Required Maximum Destruction!

Sam Liang

I know — RMDs don’t actually stand for that. They stand for Required Minimum Distributions. Many over age 70 ½ know what they are — it’s when the IRS requires you to take a withdrawal from your IRA accounts then are taxed on it. RMDs are calculated by dividing the total balance of your IRAs, employer sponsored plans (401k, 403b, etc.), and IRA based plans (SEP, Simple IRA, etc.) at the end of the previous year by the distribution period that correlates with your current...

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The Danger of Averages

Sam Liang

Math is a funny thing, especially when it comes to averages. Let me show you what I mean. Let’s assume you have $100,000. The first year it gains 10% and the second year it loses 10%. Your average return is 0%, right? We add 10, then subtract 10, then divide by 2 years. That’s an average of 0%. But, you’ve actually lost money in this scenario, and here’s how. Start with $100,000. Say you gain 10% the first year, so now you have $110,000. Then you lose 10% of the...

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Annuities vs. Bonds: which would be better?

Ash Toumayants

Senator Rob Portman recently revealed that about 10,000 baby boomers hit retirement each day. The typical retirement age is 65. This is the time when most retirees experience confusion. The employment that was a haven for income flow ceases. As such, investment advisors and consultants have recently found themselves answering questions regarding the best financial instruments and schemes to adopt for investment. One question many ask is — between annuity and bonds, which would be a better source of income for a baby boomer? Before...

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Second Opinions: Are you Confident in Your Financial Plan?

Mark Melkowski

When my son was 10 years old, he needed heart surgery. We understood the risks to his health and the dangers associated with the procedure. So, we decided to look for a second opinion. Luckily, our doctor was very helpful and referred us to a doctor well versed in these types of surgeries. For some reason, few of us ask for second opinions on our financial situations. Most of the time, this occurs because we are friends with our financial advisor and/or we don’t want...

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The 4% Income Rule – It’s Time for a Change

Steve Feeken

The common rule of thumb many advisors use, for determining the adequate amount of income to withdraw from your retirement savings, is known as the 4% rule. It simply states that if you withdraw 4% income per year from a diversified portfolio and adjust periodically for inflation, you should have enough income to last your lifetime. This theory claims that market growth should outpace the income withdrawn and also offset periods of market decline to sustain your portfolio. Becoming popular in the early 1990s as...

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