Retirement Strategies – What Might Work For You?

When it comes to retirement income planning, people may have some idea of where they should put their money. Whether it's in a savings account, employer retirement plan or other options, retirement approaches vary, and not all of these approaches lead to consistent, lifetime retirement income. You may feel that finding the right financial strategy is challenging, without professional guidance. Below are some of what we find to be retirement strategies that don’t work well.

Roth IRAs
These individual retirement accounts are popular after-tax retirement income vehicles, and many choose them because of the potential for tax-free income in retirement and ongoing ability to withdraw your own contributions without paying taxes or penalties. You get no tax credit for contributing to the Roth IRA, but the earnings are never taxed when withdrawn. They work best for retirement if you expect your tax rate to be higher during retirement than your current rate or if you start them at earlier ages, so the principal can grow over time. However, there is a downside to a Roth IRA, as there are eligibility limits, which means that if you make too much money, you cannot contribute to a Roth account.  Also, the earnings are not always liquid. While money can grow in these accounts tax-free, there are regulations which limit the availability of the account value. This means that account holders may not be able to access their money for a long time or use it when they need it. With so many unknown circumstances in life, the Roth account may not have the flexibility you want. If you cash out before the regulatory time-frame of five years or before the age of 59 ½, there are fees and expenses, which can leave you with less money for retirement than you first intended.

Stock market
You want your money to grow, but putting too much into the stock market can be risky. Stock market volatility can be even more detrimental to your retirement funding as you get closer to leaving the workforce. Even when you diversify your investments in the stock market hoping to earn regular, large returns to go toward retirement income, the stock market “averages” don’t often average out. The losses in 2004 and 2008 have taught those nearing retirement some caution about further trust in market outcomes. And, of course, most of these stock options don't have guaranteed growth or any type of guarantees at all – you can lose money, including loss of your principal.

Fixed annuities
Other options to earn a consistent return for retirement income include annuities. One such alternative is a fixed-rate annuity, which is purchased in a lump sum or they can be paid for on a periodic basis from an insurance company, and the buyer begins to receive payments at a specified date in return. Fixed annuities have no exposure to stock market risk and buyers are guaranteed* a rate of return, giving them reliable income that could last throughout their lifetime.**

*Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurer.

** Some fixed annuities may have a lifetime income guarantee as part of the base policy; others may have riders available for a cost that provide this benefit.

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fernanda
May 23, 2017 @ 10:38 pm

Top Retirement Income Planning Mistakes To Avoid

With many U.S. workers concerned about their retirement finances, it may be beneficial to review some of the most common retirement income planning mistakes and ways you might be able to avoid them. Every day, thousands of Baby Boomers reach retirement age, and not all of them are prepared to leave the workforce. Here are some potential retirement mistakes to know and avoid:

Misestimating age of death
Many seniors will cover their retirement finances until the age they expect to die. However, life expectancy has risen over the years,1, 2 and some may find themselves running short of money. A mistake in forecasting cash flow needs, particularly later in life, may leave some seniors vulnerable when they need financing for daily life or medical care costs. While Social Security benefits and employer-sponsored pension plans will pay out over the entire course of someone's life, seniors may still need supplemental cash flow for living costs and other expenses. One source of this supplemental income could be the purchase of an annuity in conjunction with their other income. In addition to other retirement resources, annuities* can help provide greater financial confidence for seniors, by providing them lifetime payments. **

Not planning for inflation
Over time, prices are likely to rise, which means seniors may need to have more assets put aside to accommodate for inflation costs. Medical costs, in particular, are commonly underestimated in retirement income strategies. A recent study by Fidelity found that a 65-year old couple will need $220,000 to cover their medical expenses throughout retirement.3 While this is a drop from the $250,000 estimated in 2010, it is still a significant chunk of change that could vary depending on a person's medical conditions. Because this substantial cost could increase over the years, seniors need to plan ahead so they are still financially stable in their later years.

Relying only on Social Security
After paying into the Social Security system for many years, seniors who leave the workforce may think they will have enough income during retirement with Social Security. Unfortunately, these benefits are often not enough to maintain seniors’ desired lifestyle, which means they may need or want another source of steady income to maintain their lifestyles. For this reason, it is essential to have a supplemental income source for Social Security benefits, like an annuity. You can purchase an annuity* that can then provide additional income during your retirement years.

Not starting sooner
Most people will agree that it's best to start saving for retirement as early as possible. This provides the most time to build up a nest egg, as well as give investments time to grow and recover from any stock market down years. While starting early is a good step, it's also necessary to review and revise your retirement strategy over the years to help maximize assets in preparation for retirement income in the future.4

 

 

*Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurer.
**Some annuities may have a lifetime income guarantee as part of the base policy; others may have riders available that provide this benefit.  Riders may also be available for benefits like an annual increase to help combat inflation or for as much as doubling your income in case of a qualifying health event.  Optional riders may be available for a charge.

Sources:

1  “Calculators: Life Expectancy.” Social Security Administration,  Accessed 6/24/2015. http://www.ssa.gov/planners/lifeexpectancy.htm
2 Kadlec, Dan. “The 7 Biggest Retirement Planning Mistakes.” Time E-Magazine, 4/17/2012 http://business.time.com/2012/04/17/the-7-biggest-retirement-planning-mistakes/
3 “Retiree Health Costs Hold Steady.” Fidelity, 6/11/2014. https://www.fidelity.com/viewpoints/retirement/retirees-medical-expenses
4 Glassman, Barry. “The 5 Biggest Retirement Planning Mistakes You Can Avoid.” Forbes.com, 5/07/2014. http://www.forbes.com/sites/advisor/2014/05/07/biggest-retirement-planning-mistakes/

 

 

 

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Josh Mellberg
May 11, 2017 @ 6:00 am

Some Things You May Not Know About Your IRA

With all the retirement terms surrounding nest eggs, savings accounts and tax deferment, it can be a challenge to know everything about all your financial investments and retirement income planning options. One area of confusion is the individual retirement account, or the IRA.

IRA’s and 401(k)s are both qualified retirement plans. A 401(k) is a plan that some employers make available to their employees. On the other hand, an individual may open an IRA on his or her own. There are two main types of IRAs: traditional and Roth IRA. This article focuses on the traditional IRA, which has different features than a Roth IRA.  IRAs are often used by those who have maxed out their employer contribution plans.  They can be opened in conjunction with other retirement income vehicles, but many individuals confuse their value and purpose. While you might have some basic understanding of your IRA, here are some things you may not know:

There are contribution caps
A good way to build up your retirement assets, is to contribute a portion of your earnings throughout your entire working life. This will give you more time to create a nest egg with the potential to last as long as you live.  However, there are contribution caps for IRAs. Each year, the IRS creates these IRA limits, which means you may not be able to contribute as much as you want.

Contributions must be cash
When you make annual contributions to your IRA, it must be done in cash. This is true in all cases except for rollover contributions.

Losses may be tax deductible
There are several tax advantages to IRAs, such as deferral of taxes on the growth of the account, or its annual earnings. However, upon distribution, you will need to pay any taxes due on the amount you receive from the account.  On the other hand, IRA investments that lose value can be potentially tax deductible. They cannot offset the gains and taxes you must pay, but you can deduct losses in certain circumstances.

There are required distributions
Once you reach 70 ½ years old, you are required to start taking distributions from your IRA. This is similarly true for other qualified retirement plans, like your 401(k). How much you are required to take out will depend on a specific formula, but you could incur tax penalties if you do not start to take distributions by this age.

An annuity can be used in an IRA
An annuity is an insurance product that can be used for an IRA. However, there are no additional tax deferral benefits than what are inherent in an annuity. In addition, the future benefits of an annuity are based on the financial strength and claims paying ability of the issuing insurance company.

 

*This article is not intended to provide legal, tax or investment advice. See a licensed professional in these areas for applicability to your situation.

 

 

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Josh Mellberg
May 9, 2017 @ 6:00 am

Inflation in Retirement

Can you remember when gas only cost a buck or when soda pop cost just a few cents? If you look at prices now, you can clearly see the effects of inflation over the years. As time goes on, the cost of everything becomes more expensive and you can buy less and less with a dollar. While inflation isn't something you can control, it's also something you shouldn't ignore when it comes to your retirement income planning.

Throughout your working life, you've probably accumulated a nest egg, contributed to your employer's 401(k) and sought to figure out how much you will need in retirement. However, the money you have saved today could actually be worth less in the future due to inflation. So, how can you help protect your assets from rising inflation?

Annuity strategy
Many people were hesitant to invest in the stock market after the recession, and as such have put their money into lower-yielding savings accounts or the like. People approaching retirement typically want the same thing – potential growth without direct downside market risk or huge fees. Fortunately, there is another alternative with less risk. Annuities may be a great answer to help seniors who want to help offset inflation.

An annuity is a contract between you and an insurance company in exchange for a lump sum payment or series of payments resulting in regular, ongoing disbursements. This type of contract helps gives you predictable income when you need it most. Social Security and pension plans may also pay you for the rest of your life, but there's a good chance these are not enough to live on, and therefore need to be considered supplemental income. When you purchase an annuity, your payments can start right away or at a later point in time.

There are several annuity options available for you.  We at J.D. Mellberg have proprietary insurance contracts and strategies that less than 1 percent of agents and advisors across the country have access to, which means we may be able to bring you 15 percent to 20 percent more income.

Inflation protection
To help protect your assets from inflation, you can include an optional annuity rider for a charge that allows your payments to be increased to help guard against inflation, which means you'll receive more money later in life when you need it most.

Get in touch with one of our professional agents today to find the best retirement income strategy for your needs. Be confident you will not outlive your money with lifetime payments from an annuity.

 

 

 

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Josh Mellberg
May 4, 2017 @ 6:00 am

Habits of Successful Retirees

What's the difference between retiring and retiring successfully? Habits.

When it comes to the way we eat, how often we exercise or putting away money for retirement, daily and yearly habits are what make us successful. However, not all habits will bring you down a path toward financial stability. Here are some habits of successful retirees that can help you with retirement income planning:

Live with some urgency
To have an active and successful retirement, you can't sit idly by as if life goes on forever. Instead, successful retirees seize each and every day to stay healthy and happy. You can apply this to all aspects of life, from what you do during retirement to the way you save money throughout your working life. A sense of urgency can call you to action, so you're more likely to prepare for a great retirement.

Retire by your financial assets, not age
It is largely accepted that the average retirement age is 65 in the U.S. However, not all Americans will leave the workforce at age 65 – many will continue working for more years, while others may retire before then. While you might have a certain age in mind, it can be more worthwhile to create a financial strategy that helps enable you to retire based on your finances instead of your age. This helps ensure that you have enough money for the rest of your life.

Take some risks
In many cases, it is best to minimize risks – this is especially true with your finances. However, you don't always want to live your life on the safe (and boring) side. By purchasing an annuity you can receive guaranteed* payments for the rest of your life. Once you know your retirement income is in order, you can be free to take some risks in other areas of your life and pursue your lifestyle goals.

Seek professional assistance
Believe it or not, many Americans approaching retirement haven't properly planned their finances for later in life. One way to help ensure you have a retirement income strategy that is best for your needs is to get in touch with one of our agents at J.D. Mellberg. We have proprietary insurance contracts and strategies that less than 1 percent of agents and advisors across the nation have access to, which means may be able to bring you more income in retirement. Our team will help you find a strategy based on your financial goals to help ensure you can live a comfortable retirement.

 

*Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurer.

 

 

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Josh Mellberg
May 2, 2017 @ 6:00 am

5 Reasons An Annuity Might Be Right For You

Between a 401(k) and an Individual Retirement Account, you may think you have your retirement finances covered. You may have investments, but feel somewhat hesitant about investing more in the stock market in a recovering economy. Fortunately, you can purchase an annuity with a portion of your wealth as an alternative financial vehicle with guaranteed* income in retirement. Here are some of the top reasons an annuity may be right for you:

Steady retirement income

The most common reason you may choose to purchase an annuity is for the stable income you can receive during retirement. You can choose to purchase an annuity that provides payments throughout retirement,** giving you a steady source of income. Some seniors may choose to rely on Social Security and their savings alone, but as seniors continue to live longer, there's a good chance some may run short of funds in retirement. With an annuity that provides a steady stream of income, there is no risk of outliving that retirement income.*

Retirement funding options

All retirees want to have the option to keep their retirement funds protected from stock market risk, while some would like to have the option to also allow their funds to grow in the stock market. With a fixed annuity, there is a guaranteed* rate of return without exposure to stock market risk. With a variable annuity, which does have stock market exposure, you have the option to receive a higher return by taking into account market fluctuations and you also share the risk of losses, including loss of principal.

Accounting for inflation

With regular financial planning for retirement, some may forget to take into account future costs of living. With rising health care costs, long-term care costs and economic inflation, the likelihood of higher expenses isn't always fully considered. With an annuity, you have the potential to better plan for retirement with increasing income*** while accounting for inflation over the years.

Greater financial confidence

At retirement, seniors can sometimes be concerned that they will run short of money or need to spend too much unexpectedly. The purchase of an annuity can provide greater financial confidence by guaranteeing* that regular income for the rest of your life.** A nest egg is an integral part of retirement income planning, and an annuity can provide additional financial stability. You can enjoy retirement more, knowing that you don't have to take a reduction in income later in life.

Tax advantages

With qualified retirement plans like 401(k)s and 403(b)s, where your contributions are tax deferred, you pay taxes as you use the funds, including the capital gains tax and income taxes. When you purchase an annuity, the growth and compounding interest grows tax-deferred. Once you begin withdrawing income, you will need to pay income taxes on the earnings, but your principal comes back to you with no tax liability.

 

 

*Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurer.
**Some fixed index annuities may have a lifetime income guarantee as part of the base policy; others may have optional riders available for a charge that provide this benefit
***An increasing income rider, purchased for a charge, can provide automatic increases to the regular income stream to help counterbalance inflation.

 

 

 

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Josh Mellberg
April 27, 2017 @ 6:00 am

Annuity Types

During your retirement income planning, you've probably come across the term “annuity” before, but may not fully understand what the differences are, how they work, or all the options they present. While your financial needs are likely different from another person upon approaching retirement, most people want the same financial confidence in their retirement income strategy.

Immediate annuity – 1

For many seniors, retirement income planning can be a challenge. If you're approaching retirement, it's not too late to maximize your financial well-being for the rest of your life, but you may still be unfamiliar with an immediate annuity.

An immediate annuity is a contract you purchase from an insurance company for a single lump sum premium where you will start receiving a steady stream of income in return. An immediate annuity gives you the advantage of being able to start receiving payments for retirement right away, and payments can last for a set time period, such as 10 years, or for life.

Who should purchase an immediate annuity?
There are many types of annuities that can allow you to receive payments at another point down the road, but an immediate annuity will give you income right away, and you can count on that payment to continue, possibly for your life.

What are some of the benefits?

  • Timing:  Payments start immediately; there’s no waiting.
  • Simplicity: After your initial premium payment, all you have to do is sit back and collect your payments. You know where your retirement income is coming from and you know how much you will receive each period.*
  • Stability:  May be good for a retiree who is looking for stable, consistent income to supplement other retirement earnings.

What are some of the disadvantages?

  • Control: You lose control of your money.  In other words, you are required to “annuitize” it, or start receiving regular payments.  Once the contract is set it cannot be changed nor can you make additional withdrawals or change the payments.
  • Inflation: The payments are fixed and will remain the same throughout the term of your annuity contract.

An immediate annuity from J.D. Mellberg Financial can help provide retirement income for the period of time you contract for. Our network of financial professionals has access to proprietary contracts and strategies that less than 1 percent of agents and advisors across the country have available.

Josh Mellberg is insurance licensed in all 50 states and all employees of J.D. Mellberg Financial have the appropriate licenses for the products they offer.

*All annuity features, benefits and guarantees rely on the financial strength and claims-paying ability of the issuing insurer.

Fixed annuity – 2

Having a steady income during retirement can help you maintain your lifestyle after leaving the workforce, but there are some concerns of outliving your money without proper financial planning. During your working years, you may have contributed to your employer's 401(k) retirement plan as well as built a nest egg, but there's a chance it won't be enough.

That's where annuities can help. With a fixed annuity, you can have a steady source of income later in life. A fixed annuity is a contract between you and an insurance company which promises to provide an income stream at a future date for premium(s) paid.

Some of the benefits of a fixed annuity
You can enjoy the benefits of a fixed annuity in a number of ways.

  • Growth: Fixed annuities can help provide you with slow, steady growth.
  • Guaranteed* income: A fixed annuity offers can bring you greater financial confidence knowing you will have money coming in during retirement.
  • Fixed interest rate: You will receive a fixed interest rate on your money for a certain period of time.  After that, your annuity continues to grow at the interest rate set by the insuring company.
  • Tax deferral: While your money is growing, you do not have to pay any taxes on these earnings. You can defer taxes until later in life when you may be eligible for lower tax rates, allowing you to keep more of your money.
  • You may be able to withdraw up to 10% of your principal out annually, in addition to your annuity income stream, without penalty.
  • Lifetime payments: Some fixed annuities may have a lifetime income guarantee as part of the base policy; others may have riders available for a charge that provide this benefit, which can help ensure that you won’t run short of money in retirement.

What are some of the disadvantages?

  • The interest rates for fixed annuities may be lower than for other types of annuities.
  • The rate is locked in by the contract for a period stated in the contract; however at the end of each period, the insurance company may drop the interest rate.
  • Other than a 10% withdrawal often allowed annually by contract, once you annuitize, you lose control of your money.

Fixed annuity options
J.D. Mellberg offers a variety of fixed annuities. You can purchase an immediate annuity, which will start providing you with payments right away, or a deferred annuity that allows you to delay the start of payments. Both of these types of annuities help provide you with predictable income when you need it most.

When you retire, you won’t need to be concerned about outliving your income. Our financial advisors and licensed insurance agents will explain your retirement options and provide guidance to find help you find a financial strategy that makes the most sense for you.

Josh Mellberg is insurance licensed in all 50 states and all employees of J.D. Mellberg Financial have the appropriate licenses for the products they offer.

. *All annuity features, benefits and guarantees rely on the financial strength and claims-paying ability of the issuing insurer.

Variable annuity – 3

In the business of retirement income planning, a wide variety of options are available for you to choose from. Because many Americans want to have the benefits of greater potential growth than a fixed annuity, they look at a variable annuity.

What is a variable annuity?
The variable annuity is a tax-deferred insurance product with an investment feature. It allows you to choose a variety of investments, typically, in a portfolio as a package which could include some stocks and bonds directly linked to the stock market. You purchase these investments and will receive payments later based on how they do in return.

What are some of the advantages?

  • Tax deferral: While your money is growing, you do not have to pay any taxes on these earnings.
  • Deferred capital gains tax: You do not pay long-term capital gains on profits. Variable annuities allow your money to grow tax-sheltered, which means your funds can be traded back and forth without paying taxes.
  • Potential for lifetime income: You can purchase a rider for a charge that allows you to receive payments for the rest of your life, which could mean you will never outlive your assets.
  • Potential growth: One of the main attractions of the variable annuity is the potential for growth. If the market does well while you own the variable annuity, your assets can grow, generally more than a fixed annuity, and provide more income throughout retirement.

What are some of the disadvantages?

  • A number of fees can be attached to variable annuities – up to 10 different types that can have an impact on your overall return. You will want to understand them before purchasing a variable annuity
    • Administration fee: Most companies have these fees for all types of annuities and they can range from 1 percent to 2.5 percent per year.
    • Mortality and expense fee: All annuities have these fees and they are generally in response to the tax advantages that annuities offer. These fees are typically between 1 percent and 2 percent annually.
    • Mutual funds fee: Between 0.5 percent and 2 percent per year, you will see these fees with variable investments because they are in mutual funds.
  • Potential loss of money: Because your funds are exposed to market risk, you can lose money, up to and including loss of principal (the amount you paid in premium).

When choosing among variable annuity options, be sure to ask about all associated fees.

Josh Mellberg is insurance licensed in all 50 states and all employees of J.D. Mellberg Financial have the appropriate licenses for the products they offer.

*All annuity features, benefits and guarantees rely on the financial strength and claims-paying ability of the issuing insurer.

Fixed index annuity – 4

With your retirement money, you want secured income later in life and the potential to grow your assets. By purchasing a fixed index annuity, you may be able to accomplish both.

What is a fixed index annuity?
It can incorporate the best of two worlds. You pay one or more premiums in return for a stream of income or withdrawal privileges at a later date. The premium you have paid in is protected from direct downside market risk, as it is not an investment. However, the annuity is also “tied to” a stock market index to help increase your potential for earnings.

What are some of the advantages?

  • Guaranteed* interest rate: A basic interest rate is guaranteed for a period of time. The interest rate can change from time to time – see your contract for specifics.
  • Protected from direct downside market risk: When the index goes up, your interest earned can go higher. When the index goes down, however, your earnings are locked in and do not go down.*
  • Potential lifetime income: Some fixed index annuities may have a lifetime income guarantee as part of the base policy; others may have riders available for a charge that provide this benefit.

*All annuity features, benefits and guarantees rely on the financial strength and claims-paying ability of the issuing insurer.

What are some of the disadvantages?

  • The potential earnings from the index growth will have limits on participation and “caps” – for instance, if the market index should grow by 10% and your contract has an 8% cap, you will only receive 8% of that growth.
  • The method of indexing will vary among contracts, and can minimize or increase the benefits.
  • The index being tracked may be a common one, like the S&P 500® or it may be a “designer” index set up for fixed index annuities specifically, and may have less proven results.
  • You may still lose money because the amount guaranteed on fixed index annuities may lag behind your initial premium to start with. It may take years for the guaranteed amount and the contribution level to merely "break even."

How can I get started?
To help you secure a steady stream of income and increase your financial security in retirement, our team of knowledgeable, licensed advisors and agents can help you get started see if an annuity may be right for your goals in retirement. If so, we can help you find the type of annuity and the specific contract that works well for you. We know the importance of proper money management strategies that will last you the rest of your life. J.D. Mellberg agents are among the top 1 percent in the country, and will strategize with you to help you obtain the highest income and the lowest costs available.

Josh Mellberg is insurance licensed in all 50 states and all employees of J.D. Mellberg Financial have the appropriate licenses for the products they offer.

*All annuity features, benefits and guarantees rely on the financial strength and claims-paying ability of the issuing insurer.

 

 

 

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Josh Mellberg
April 25, 2017 @ 6:00 am

Will I Outlive My Retirement Money?

One of the most common questions seniors ask themselves when approaching retirement is whether they will outlive their money. After years of working hard and putting money aside in pension plans and 401(k) retirement funds, it seems that financial income planning for seniors should be straightforward. However, it's not an exact science to determine how much one will need in retirement. 

Why seniors make this mistake

With the improvements in modern medicine, people are living longer today than ever before. For those entering retirement, this could be a concern in terms of finances, as it is possible to outlive retirement planning. According to the Social Security Administration, a man turning 65 today can expect that he will live until the age of 84. For a woman turning 65, they could live to be 86 on average. Of course, these figures are just averages, and it is possible for seniors to live even longer. In fact, one out four seniors turning 65 today will live past 90 and one out of 10 will live past 95.*

Many take their best life expectancy guess to try to determine how much money they may need in retirement, but that estimate could be wrong and leave them in a vulnerable position. While Social Security benefits will last a lifetime, it typically is not enough to live on alone.

The annuity answer

Because no one can predict how much is needed for retirement, more seniors are turning to annuity products to help meet their retirement goals.  An annuity is a contract between you and an insurance company in which you make a lump sum payment or series of payments and in return obtain regular disbursements beginning either immediately or at some point in the future. Many annuities can provide a predictable stream of income once you start receiving payments.  During the first years, usually 5-10 years, a surrender charge may apply if you decide to withdraw some of your funds.  Please see your annuity contract for guarantees**, terms, exclusions and limitations.

When people are young, accumulating funds and the rate of return is the focus in retirement income planning.  However, as people get older, their focus shifts to protecting assets and ensuring a stable income later on. Furthermore, seniors may want to take their money out of the stock market when downfalls occur, thereby reducing their assets.

With the right annuity for their needs, seniors can help ensure they can meet their retirement goals. A steady stream of income is important for retirees to help maintain their lifestyle, and the right annuity can help provide a financial answer.

 

Sources:

*http://www.ssa.gov/planners/lifeexpectancy.htm last accessed June 27, 2014.
If you are unable to access any article referenced in this report, please call 1-888-565-8975 to request a copy.
**Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurer.

Additional Information

http://www.forbes.com/sites/laurashin/2014/01/03/the-13-biggest-money-mistakes-retirees-make/
http://www.nextavenue.org/article/2014-02/avoid-these-5-money-pitfalls-pre-retirees
http://money.msn.com/retirement-plan/7-mistakes-retirees-keep-making
http://www.raynoel.com/new/raymondnoelassociates/pdf/Top%2010%20Mistakes%202014.pdf?advisorid=3002242
http://www.retirementwatch.com/BlackBookofIRASecrets.cfm
http://www.prudential.com/view/page/public/11421
http://money.cnn.com/retirement/guide/annuities_basics.moneymag/index4.htm

 

 

 

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Josh Mellberg
April 21, 2017 @ 6:00 am

Is An Annuity Right For Me?

When it comes to retirement income planning, there are many options that can help provide income later in life. Many employees may take advantage of their employer's 401(k) retirement plan, but you can also increase your financial confidence with an annuity.

According to the Pew Research Center, 10,000 baby boomers retire every day*, which means many are leaving the workforce and relying on their savings and other assets to help fund their life after retirement. While some might also include Social Security as part of their retirement income, it typically is not enough to live on alone. It is therefore important that those approaching retirement make smart choices that will help them for the rest of their lives.

What is an annuity?

An annuity is a contract between you and an insurance company in which you make a lump sum payment or series of payments and in return obtain regular disbursements beginning either immediately or at some point in the future. Funds accrue on a tax-deferred basis.  Many annuities can provide a predictable stream of income once you start receiving payments.  During the first years, usually 5-10 years, a surrender charge may apply if you decide to withdraw some of your funds.  Please see your annuity contract for guarantees**, terms, exclusions and limitations. For those who already have other pension plans, annuities can be a supplement to help meet your financial goals.

Social security and pension plans will help provide income to last your entire life, but an annuity can also help provide additional funds to help maintain your lifestyle in retirement.

Benefits of an annuity

One of the advantages of an annuity is more financial confidence in meeting your retirement goals.  Many annuities allow you to choose to receive payments until your death, and this helps ensure you won’t outlive your retirement funds.

Individuals who own these annuities take advantage of any earnings that accrue over the years and have more financial confidence knowing there will be a stable income source in retirement. Since the recession, many Americans have felt reluctant to invest their money back into the stock market. As such, fixed, indexed and immediate annuities have become more popular and there are more options than ever before. For consumers, this is the best time to make an annuity part of their retirement income strategy, helping turn wealth into a steady income.

 

Sources:

*http://www.pewresearch.org/daily-number/baby-boomers-retire/ December 29, 2010.
If you are unable to access any article referenced in this report, please call 1-888-565-8975 to request a copy.

**Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurer.

Additional Information:

http://money.cnn.com/retirement/guide/annuities_basics.moneymag/index10.htm
http://www.forbes.com/sites/deborahljacobs/2012/02/15/the-abcs-of-annuities-8-questions-to-ask-before-you-buy/
http://www.dailyfinance.com/2011/07/06/are-annuities-right-for-your-retirement/
http://www.annuityfyi.com/is-an-annuity-right-for-me.html
http://www.aarp.org/money/investing/info-11-2013/is-an-annuity-right-for-you.html

 

 

 

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Josh Mellberg
April 17, 2017 @ 10:36 pm

What I learned from losing money in the stock market

Josh MellbergEveryone wants their money to grow so they can have reliable income for retirement. In order to turn a profit, many will attempt to earn a higher return by purchasing stocks. However, there are many risks associated with doing so and some can hinder your financial situation as you approach retirement. Here are some of the concerns when it comes to investing in the stock market:
  • Get-rich-quick schemes: There are few ways to lose money faster than by attempting a “get-rich-quick” strategy, and there is no promise that you will increase your wealth by purchasing stocks. While it is possible to increase your assets by building a portfolio of stocks, you should be wary of any book or person who tells you their stock will help you amass wealth quickly.
  • Following a hot tip: It can be tempting to follow through on a stock market tip from a friend or relative about a particular stock, but the truth is that most individuals don't have enough information to make such recommendations. In some instances, you could have a friend who has real knowledge about a certain stock, but by recommending its purchase, he could be in danger of violating security laws regarding insider trading.
  • Making a "sure bet": Unfortunately, there is no such thing as a “sure bet” in the stock market. If you have some expertise in one industry or subject, it's important not to overestimate your knowledge of how that could play out in the stock market. Remember that large companies and firms on Wall Street have extensive knowledge regarding financial markets and have a team of experts on hand to make decisions – and even they don’t bat 1000. Even if you can understand balance sheets and income statements, it doesn't mean your stock market analysis will be profitable.
Investing after a loss If you've ever experienced a loss in the stock market after purchasing a stock, you may be unwilling to put more of your hard-earned money back into stocks. However, there are other alternatives to purchasing stocks to help grow your retirement income without stock market risk. One such option is a fixed index annuity. Annuities are contracts that are purchased from an insurance company in either a lump sum or a series of premium payments. You receive income or can withdraw funds immediately or at a designated point later on.  The income can last for the rest of your life, either as a benefit of the base contract or with the purchase of an income rider. Compared to the stock market, there is little risk and you can watch your money grow at a steady rate that is guaranteed* to help bring you a reliable source of retirement income. Get in touch with one our agents at J.D. Mellberg today to start your retirement income strategy.  Just give call us today at 1-877-805-0151. By responding to this offer you may be contacted by a licensed insurance agent regarding retirement income planning using fixed insurance products. Josh Mellberg is insurance licensed in all 50 states and all employees of J.D. Mellberg Financial have the appropriate licenses for the products they offer. *Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurer.Josh Mellberg
July 29, 2016 @ 8:00 am