“I am 10 years from when I would like to retire and have approximately $500K in “liquid” assets – by that I mean a mix of cash, stocks, IRAs and one Equity Index Annuity worth about $125K.
That has always been a concern of mine. I bought it when I was much younger. It was a 17 year annuity and offered a 10% sign on bonus and the agent said, ‘what’s the big deal about tying up this amount of money up for 17 years, you’re young, it’s not like it’s the only money you’re ever going to have to invest’. Like he said, I was young and that money has been tied up for a very long time and hasn’t performed very well.
Anyway, I would like to begin the process of planning for my retirement. I mean, I have been saving money for my entire life but didn’t really have a roadmap as to what I was actually doing…. a lot of my investing was random. I would love to chat with someone who can analyze what I have and together develop a plan to maximize these next 10 years”
Well, quite conveniently for the both of us, planning to maximize your next ten years (and well beyond) is exactly what our More than Money advisors do for our clients.
We use a tool, JourneyGuide, that allows us to project the impact of your financial decisions into the future. Your precise numbers, assumptions, and goals are processed by a powerful software package to demonstrate the impact of decisions you are considering. And, most useful, is the ability to compare the impact of two decisions side-by-side.
For example, you could compare the impact of keeping or liquidating the Fixed Index Annuity that currently irks you. You may well find that keeping it fits your needs quite nicely. Or you may find (confirming your dissatisfaction) it has to go. But either way, you will have made that decision by being logically informed not emotionally inclined.
Our More than Money advisors offer you (and you our readers) the opportunity to experience JourneyGuide at no cost. Please reach out to our office to schedule your time to explore your financial future and then make the decisions that will give you the best probability of a successful retirement.
“I certainly could use your insight into my dilemma. I am 75 and seriously considering moving into a CCRC. There seem to be two options: 1) a steep initial buying and a reasonable monthly charge for service rendered; or, 2) a lesser buying and a steeper monthly charge for service.
I have a monthly income of $6,000 – composed of Social Security, a pension and a lifetime annuity. I have $350,000 in a money market. Should I consider the lower buying with the higher monthly charge or should I consider cashing in my annuity ($150,000) and choosing the higher buying. I have three children and 1 grandchild to whom I would like to leave some inheritance. I am very confused. Although I live independently now, I cannot foresee the future and want to be prepared.
Thank you in advance for your advice.”
I am glad to hear that you can’t foresee the future. I would be quite worried if you thought that you could. However, you want to be as prepared as possible and that is a most worthy goal.
Leaving your family some inheritance is a wonderful goal. Leaving them a legacy is even better. One of the best approaches to leaving a legacy I’ve shared with many of my clients over more than forty (40) years of advice is to live one’s life to be personally and financially independent. This legacy of being a role model of independence for your family is worth far more than money.
Make the choice that best fits you and allow your inheritance and legacy to follow suit.
One strategy to consider is to buy in with a slightly higher investments and use the savings from lower monthly payments to fund the premiums on a life insurance policy. In this way, if your stay at this CCRC is unexpectedly short your family will receive a guaranteed inheritance. If your health permits you to qualify for such a policy, it might give you the result you wish.
If you wish to explore your life insurance options, please let us know. Our More than Money advisors have in Ash Brokerage a wonderful partner who can explore dozens and dozens of life insurance companies with one application. It is a very efficient way to explore your options and insure you’re getting the plan that best fits you.
“We’re thinking about pulling back from stocks now that we’re so close to retirement. My plan is to retire at the end of January when I’ll be 66 and 2 months old. That’s my FRA.
Also, the markets, the USA and the world seem very chaotic right now which isn’t good for stocks. It may be a good time to get out.
What thoughts do you have on this?”
Chaotic does seem to be an appropriate word for our world today. But does that mean we should leave the stock market behind? Interesting question.
Before we address the question of the chaos and the stock market, we must ask a much more important question. What return must you have from your investments so you and your spouse can retire and be happy, healthy, and enjoy peace of mind?
You may well find that you cannot confidently retire unless you have some/all of your investments in the stock market. Conversely, you may find you need little/none of your investments in the stock market. If the latter is the case, problem solved. But we didn’t solve the problem by trying to combat chaos. We solved it because we don’t need to play in that (stock market) game at all.
To be fair, the world is in chaos – and always has been. In fact, for large parts of even our most recent 100 years of American experience it has been far more chaotic. The Great Depression. World War II. The Korean War. The assassinations of John and Bobby Kennedy and Martin Luther King. The Viet Nam War. The list goes on and on.
And, in spite of all that chaos, the stock markets have (on average – over long periods of time) gone up.
Sit with a trusted financial advisor. Evaluate your retirement plans very careful. Decide on how much – if any – of your investments should be in the stock market in order to reach your retirement goal – having your money outlast you!
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