March 30, 2018

Calvin Goetz

The retirement dilemma and how annuities may help

As people plan for retirement they’re encountering many challenges, including: longer life expectancies, a shift in personal responsibility for retirement income, investment fears, and missed opportunities.  Here’s a breakdown of each:

Author Calvin Goetz, co-founder of Strategy Financial Group, LLC, an Arizona registered investment advisor, has dedicated more than a decade of his professional career to serving the financial and retirement planning needs of clients across the nation.

Longer life expectancies: Today’s longer life expectancies mean you will likely spend more years in retirement, potentially 25 to 30 years. Planning how you will fund these extra years takes on even more added importance. Today, the average 65-year-old couple has a 52% chance that at least one spouse will reach the age of 95.

A shift in responsibility: While pensions were once a reliable source of retirement income, the burden of funding retirement has shifted to the individual over the last 20 years. Regardless of whether you choose to fund your retirement through a 401(k) or other investments, you will most likely need to take a more active role in your retirement income planning in the future. 

Investment fears: A recent survey revealed that 83% of individuals are afraid of another financial crisis, and 62% are scared of investing in the stock market entirely. Many have put their money in cash or money market accounts and have been looking for safety and guarantees.

Missed opportunities: In recent years, many people who are concerned about market volatility are now frustrated with the low or no-growth rates that they receive on cash deposits. However, positive market performance during the same time period means that many people missed out on the opportunities to invest their retirement savings for potential growth. 

The solution for many of these challenges that can provide safety of principal, decent growth potential and guarantees of income for the rest of one’s life? Annuities. In particular a growing product in the marketplace called the fixed indexed annuity.

A fixed indexed annuity is a contract you buy from an insurance company to help you potentially accumulate assets for retirement.  It offers returns based on the changes of an index, such as the S&P 500 index. Regardless of index performance, the index annuity contract will not be impacted by negative index returns. Meaning that zero is the floor for any potential down year with most contracts. In addition, riders can be added to these products to generate a guarantee of lifetime income.

It’s important to understand that these are not considered investments because they cannot lose money due to market declines. They are considered savings vehicles and are designed to compete with CDs and money market accounts; another potential option to help ensure a financially secure retirement.

 

Financial adviser, retirement wealth strategist, founder of Strategy Financial Group and author of “Climbing the Retirement Mountain,” Calvin Goetz is an Investment Adviser Representative who holds the Series 65 securities license, is life and health insurance licensed in the state of Arizona and is a member of Ed Slott’s Elite IRA Advisor Group  and the National Association of Insurance and Financial Advisors (NAIFA). For more information, visit StrategyFinancialGroup.com