The Most Profitable Retirement Plans
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It's About Money Radio is your financial planning for retirement information resource. Each week we cover retirement topics including:
The most profitable retirement plans are plans that show a profit when the market goes up and offer protection from losses when the market goes down.
The rules for retirement have changed. You can no longer afford
losses when saving for retirement. Remember, every dollar lost is another dollar that isn't earning you interest. You also then have to play "catch-up" just to break even and some people never catch-up.
When looking for the most profitable financial plans, forget about the one's that promise you sky-high interest rates-of-return on your dollar. If it sounds too good to be true, it probably is. As a general rule of thumb... the higher the rate-of-return, the greater the risk, because if you can earn it fast, you can lose it just as fast.
The most profitable financial plans are conservative in nature, and offer protection from market losses, higher taxes, and loss of income.
A huge issue to consider when talking about the most profitable financial plans is to know how the money will be taxed, if at all. Taxes are one of the problems with 401(k)s and IRAs, because when the money comes out of a 401(k) or IRA, the money is fully taxed. This is why 401(k)s and IRAs are not among the most profitable financial plans. As a matter-of-fact, the average 401(k) or IRA in this country, runs out of money in less than 12 years. It is also why the Roth IRA has become increasingly popular, but even the ROTH IRA has significant limitations. That being said, a properly structured permanent life insurance policy can provide you with tax-deferred growth and tax free retirement income that you cannot outlive.
There are three phases of retirement planning. The first phase is the accumulation phase which is while you're working and building your nest egg. The second phase is the distribution phase during retirement, and the third phase is the transfer of wealth.
The most profitable retirement plans provide you with protection from financial losses during all three phases of retirement.
The key areas where your retirement plan needs protection include:
- Loss of income due to the death of a spouse
- Loss of income due to a critical illness (heart attack, stroke, or cancer, blindness, end-stage renal failure, Lou Gerig's Disease)
- The need for long term care (70% of Americans will require long term care at some point in their lives and most will not have the
insurance to pay for it)
- College tuition for your children (Tuition costs have doubled in the last 10 years alone)
- Market downturns (Warning signs are here: current unrest in the middle east, skyrocketing gas prices, US Federal deficit)
- Longevity (Retirement income needs to last 35 years)
If your retirement plan is missing protection in any of these key areas it is at risk of failure. Ask yourself this question "Will your 401(k), IRA, or Roth offer you this type of protection?"
Consider the facts:
- Americans have a 70% chance of requiring long-term care at some point in their lives.
- For married couples, the odds jump to a staggering 91% that one of them will require long-term care at some point in time.
- The odds of you being stricken by a critical illness over the next 20 years increases from 1 in 13 at age 35... to 1 in 3.5 at age 55 (male non-smokers), with the risk almost 50% greater for smokers. Yikes!!!
If you lose your income due to a serious illness, the very next thing you'll lose is your savings. Our bodies are fragile and eventually they break down...it's a simple fact of life. As you can see the most profitable retirement plans come with built-in protection in all of the key areas above, because if it is missing protection in any one area your entire nestegg is at risk.
At the heart of the most profitable retirement plans are properly structured, permanent life insurance policies and annuities, because they're the two most powerful and versatile financial tools that you can use. As a matter of fact, these two products can provide you with more benefits than any other financial vehicle.
The benefits are so great that everyone should consult with a financial advisor who specializes in life insurance and annuities. Most good financial advisors will not charge you for a consultation and will even provide you with an customized financial plan designed specifically for you. In other words, you have nothing to lose and everything to gain when you contact a financial advisor.
If your current financial advisor has not provided you with a plan that covers everything described on this page, you should ask yourself why and perhaps it's time to get a new financial advisor. If you don't already have a financial advisor and you would like a free consultation and a free retirement plan designed specifically for you, click on the button below.
FINANCIAL SECURITY IN RETIREMENT