What Is a Reasonable Rate of Return?
A Core Principle:
You Deserve a Reasonable Rate of Return
We have three core principles. First, keep your money safe. Second, you should expect a reasonable rate of return. Third, retirement can be simple. Not surprisingly, people most often ask about return rate. Typically, clients will ask us “What is a reasonable rate of return?” They want to know how to protect their money, yet still see some accumulation.
We may have the answer
The More You Know
At Messina’s Wealth Management, we strive to educate clients on all their potential options. In this way, you can make the choice that’s right for you. What is a reasonable rate of return? When thinking about this, inflation is really the reference point. The goal is to have your money earning more than the rate of inflation without taking the risk of the stock market. We believe you deserve to feel confident about the security of your principal. By the same token, you should have a reasonable rate of return over time. Our products help clients to have the most favorable outcomes while protecting your principal.
Protect Your Principal
Plus Get a Reasonable Rate of Return*
Let’s answer the question once and for all. What is a reasonable rate of return? To answer this, we need to explain a few main ideas. First and foremost, you don’t have to settle. Maybe you know you’d like a more conservative approach for your money. However, most of the options out there seem disappointing.
Simple savings accounts, for example, offer historically low rates. Compared to savings accounts, certificates of deposits (CD’s) may have slightly higher rates, but the difference is rarely enough to get anyone excited. Savings bonds are typically thought to be very secure investments. Nevertheless, the value of these is still significantly impacted by the interest rates at the time. Most often, the rates are also very low.
What is a reasonable rate of return?
Let’s explore. Though interest rates fluctuate, typical fixed index annuities can provide anywhere from 3% – 6% interest over time. This range depends upon many factors. Here’s a short list of some variables:
(1) Term of the annuity
(2) Additional benefits of the annuity
(3) Amount placed in an annuity
(4) Whether or not you have an income rider
(5) Policies and conditions set by the annuity insurance company provider
What we offer:
Strategies As Individual As You Are
It should be noted that every financial situation is different. Therefore, we recommend you meet with us to review your current policies. Sometimes we discover that our clients current strategy is already working for them. Otherwise, we can work with you to review other options for improving your outcomes.
Not Enough Interest Vs. Too Much Risk:
What Is a Reasonable Rate of Return?
Many retirees quickly discover that the low interest simply doesn’t provide them with enough income to live on. While your money may be secure, your income generated may not cover everything you need. To be sure, many people feel these types of “play it safe” options aren’t optimal. So, we are back to the question, “What is a reasonable rate of return?”
As an alternative to lower-interest savings accounts, CD’s or bonds, some retirees consider investing in higher interest rate options. The point often overlooked here is this: now your money is more at risk. What happens if there is a market crash? Will the earnings you made be enough? Or, would you need to go back to work in order to cover the gap? This is a situation that no one in retirement wants to be in.
Ideally, you want your interest rate to be higher than the most conservative options. However, you also need your money to be safe. This is where certain types of annuities and life insurance products come in. Want to know if these options might be right for you? Contact us to set up your no-obligation appointment, today.
I want to learn more about keeping my money safe...
While still earning a reasonable rate of return.
*Reasonable rate of return over time.