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Retirement Tip of the Month

Don’t Make Hasty Decisions When Tensions are High

It’s important to stay skeptical of promises of sure things during unsure times. Is a simple and reliable investment really simple and reliable, or does it just appear that way because the world is spinning?

Jason Zweig at the Wall Street Journal says “As Russia launches its blitzkrieg against Ukraine, my inbox brimmed with reports from investment firms on what you should do next.” Zweig goes on to say that Russia’s aggression has caused uncertainty that’s raising rates in a way that the U.S. economy may be “too frail to withstand.”

Major market indexes, such as the S&P 500, recovered fairly quickly from the dip that happened alongside the invasion of Ukraine. And as a result, many people are suddenly sure that it’s a safe time to invest. However, there’s no predicting the changes in the market. This is because there’s no predicting changes in the geopolitical climate. For example: Back in August of 2001, the Federal Open Market Committee said they’d be raising rates “relatively soon.” But, after the September 11th terror attacks, the Fed dropped rates by .15% in less than two months. To quote Jason Zweig again: “Investors who overhaul their portfolios based on what the Fed seems likely to do could get stranded if it does something else entirely.”

Few Things Are Certain

In recent months, many professional investors began redistributing their holdings. They did this in an attempt to cash in on rate changes by the Fed. Many expect these changes are inevitable, but, in uncertain times such as these, this assumption might be unwise.

With emotions running high, it might be tempting to make an investment that feels completely sure in order to provide more stability. However, hastily made decisions are often wrong. Maybe you’re going to try to reconstruct your portfolio based on predictions about the market due to current events. For example, a boom in the U.S. exports of natural gas, or higher military spending. The risk, though, is that those scenarios often don’t materialize. “And, even if they do, they can become too popular, eliminating the bargain prices that produce superior returns,” says Jason Zweig from the Wall Street Journal. What if there was an alternative to stock market investments? Well, we might be able to offer you one!

Ways We Can Help

Zweig’s article goes on to suggest that, while you shouldn’t make risky investments at this time, you shouldn’t overhaul your portfolio, either. However, we have some information that may benefit you. Are you struggling to manage your investments right now? Are you unsure of the best way to keep your money safe? You wouldn’t be the only one. There are products, however, that can get you income based on the growth of a stock market index, without actually investing money directly in the stock market. Annuities, and, more specifically, fixed indexed annuities (FIAs), are an option worth considering.

In case you’re unaware, an FIA is a contract with an insurance company. First, you contribute a certain amount of money to the annuity. Then, the accumulation phase begins. During this period, the money increases based on the performance of an index. However, if a stock market dip occurs during this time, you aren’t at risk of losing that money. Your principal amount is protected, backed by the claims-paying ability of the insurance company. It’s also worth noting that the accumulated interest is not taxed,* since an FIA doesn’t apply to the same tax rules that other types of savings accounts do.

Other benefits of FIAs include the income generated being tax-deferred, the option to select an income rider (which can help you compensate for inflation), and a death benefit that doesn’t go through probate, and comes with other benefits for your beneficiaries.

Safety is an important factor to consider when trying to save money for retirement and for your beneficiaries. This is the case even more so during uncertain times like these. Even if you believe a stock market is safe, you should put at least some of your money in safe alternatives.

35% Bonus

Additionally, annuities are in some cases set up with bonus options. Some of these bonuses happen during the first 12 – 18 months. Others are set to kick in after a certain number of years. The reason we bring this up is that right now, for a limited time, one of our annuity products is offering a 35% bonus. So, for example, if you contribute $100,000 to your annuity, $35,000 will be added to your retirement and wealth benefit. If you purchase an annuity as part of your retirement strategy, this could be a very beneficial feature for you.

Are you looking for more information about annuities, and how one might be able to help you? Safety and security are vital qualities in a financial vehicle. This is especially true if you’re trying to save money for retirement. And, these are difficult and uncertain times. Reach out to us for more information. You can schedule an appointment with us, or attend one of our seminar events. We’ll talk more about FIAs and how they differ from stock market investments. It’s possible that we have the key to your financial future.

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