HOW TO KEEP RETIREMENT ASSETS SAFE IN A VOLATILE MARKET

               THE S&P INDEX DROPPED 5 WEEKS IN A ROW!
             S&P Stock Index Shows Decline, Annuites Can be a Solution

The S&P Stock index dropped 5 weeks in a row; reducing this year's yield by 1/2!
(Source:  Jeffrey Kleintop, CFA, LPL June 6th Newsletter.)


Jeffrey Kleintop, and industry expert; states that jobs are increasing at the best rate since the recent economic decline; but further states: "Last week's reading on the ISM index confirmed that the economy has entered a period of slower growthand stock market performance is likely to be modest and volatile in the month's ahead. However we do not envision a return to a recession or a bear market for stocks."

HOW CAN YOU PROTECT YOUR RETIREMENT ASSESTS AGAINST YEARLY VOLATILITY IN THE S&P INDEX?

This is Easy! 1 Solution is to own an Indexed Annuity.

HOW WOULD AN INDEXED ANNUITY GUARANTEE SAFETY?

Principal and Minimum interest is guaranteed by contract and annual yields have a reset formula:                                                                                                                         An indexed annuity has unique options for crediting annual interest to your account that
guarantee by contract that credit interest when the index goes up; while locking in that interest yearly.
In other words, if the index goes up, interest is added to your account.
If the S&P goes down the next year; your account is credited with  0 % for that year instead of a negative number. (This means you do not lose the prior year's growth )

You also are credited interest the next year for any upward growth from the prior year. Instead of waiting for the S&P index to recover to it's starting point; your account would get interest based on changes from year to year up to a ceiling or "cap".
There are choices of how you have your interest calculated; but with each method; your principal is fully guaranteed if you keep your contract until the end of the term. The term choices are usually 5, 7, or 10 years. The safest method is usually an annual reset choice.

YOU CAN ALSO CHOOSE TO INSURE A HIGH LIFETIME INCOME YIELD EVEN IF THE S&P INDEX NEVER INCREASES

How is this accomplished?  The answer is you can buy an income rider which reduces your annual yield with most companies by about one half of one percent.  This fee is lower than many other investment vehicles and the rider gives you this amazing option: If you stay with the insurance company 10 years and then take income payments monthly or annually you have a guaranteed income payment for life as high as 9.5% of your deposit locked in for life! ( No matter how many payments you take). If you are 65 when you take income and defer payments only 1 year:  instead of a lump sum; the yields can still be as high as 5.9%! .....No matter what the S&P index does. 
Cons: There are penalties for early withdrawal  of more than 10% in a year that dissapear at the end of term; similar to a bank account. Your earnings are limited to a cap each year due to the annual reset feature which protects you against loss in any down year.
Pros: You can have an income rider guaranteed by contract that you will have income payments that can not be outlived.
        Your accumulated account value is available probate free at death; with no fees for a will or trust.
        Your principal plus a minimum interest guarantee is fully protected if you hold it until the end of the term and take no withdrawals; similar to a c.d. account.
         If you decide to walk away with all interest and principal after the period your account can be protected against yearly stock market volatility
        If your goal is to use the account for retirement purposes; the interest crediting via the guaranteed income rider is much higher than almost all safe vehicles.

SUMMARY:    If you are worrying about S&P yearly volatility and desire tax deferral, safety, and future income: This can be an excellent alternative to other safe accounts. An indexed annuity may not be suitable for you if your goals are short term cash accumulation or if you need more liquidity due to your current financial situation and age. Please consult with your financial professional, CPA, or tax preparer before deciding if an indexed annuity is right for you. This article is presented for informational purposes only and not meant to be given as tax or investment advice. Feel free to call my office at (916) 601-5270 for a complete and free suitability review to see if this concept is the best solution for your retirement accounts.
This article can be copied or distributed as long as it is copied in it's entirety and not modified in any way. Author: Randy Taylor, Copyright Creative Common License 06/09/2011
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Life insurance and I.R.A. Account Specialist
Serving clients and brokers since 1983
(916) 601-5270



 

MEDICARE IS IT BANKRUPT ALREADY?

FIRST THE BITTER REALIZATION THAT SOCIAL SECURITY IS IN JEOPARDY AND NOW:

MEDICARE, WILL IT BE BANKRUPT?

Blog entry by Randy Taylor Financial Services, Randy Taylor
                       (916) 601-5270 for life insurance or IRA savings account estimates.

This author tends to think that we have to prepare for the worst. We should use  long term care insurance for health catastrophies, and retirement income via indexed annuity savings accounts or others, to replace or protect us against a Social Security downfall.

  Read this interesting 3rd party article regarding the instability of Medicare and make your own conclusions
NaturalNews) - Almost every American who has read a newspaper, watched T.V. or signed onto the Internet in the past few years knows that Medicare, one of the government's largest entitlement programs, is in financial dire straits and is heading for insolvency. What you may not know is that Medicare bankruptcy is closer than even the most pessimistic of previous estimates.

An annual report issued last week by the trustees of Medicare said the program won't have enough funds to pay full benefits by 2024, a full five years sooner than last year's estimate and one that may yet be even rosier than reality.

"Projected long-run program costs for both Medicare and Social Security are not sustainable under currently scheduled financing, and will require legislative corrections if disruptive consequences for beneficiaries and taxpayers are to be avoided," a summary of the report said.

Moreover, a statement issued with the annual report by Treasury Secretary Timothy Geithner said more must be done to boost financing for the program, such as "contain health-care costs," lest Medicare - and the government's other healthcare entitlement programs - become "unsustainable."

The truth is, the program has long since been "unsustainable," because for years it's been little more than a Ponzi scheme, as tax dollars from one generation are used to finance previous - and future - generations.

Investigative journalist John Stossel says what's really going on with Medicare is that the young are picking up the healthcare tab for senior citizens, even those who are financially well-off. And while today's Medicare recipients did, in fact, contribute to the program from their own paychecks when they were still working, experts Stossel says "the average Medicare beneficiary today collects two to three times more money than he paid in."

"We locked up Bernie Madoff for running a Ponzi scheme. Medicare is a bigger one," says Stossel.

Worse, the unfunded portion of Medicare is bad and getting worse. A 2008 assessment by the program's trustees found that Medicare's unfunded liability portion is $74 trillion, five times more than Social Security's unfunded liability. And the government only expects its healthcare outlays to grow.

One of the reasons why Medicare - and any government-run healthcare system, for that matter - is so expensive and an impediment to better healthcare in the first place is because it is a system that is inherently inefficient. And that built-in inefficiency is why so much Medicare money is wasted on entire industries like Big Pharma.

"While our health-care system has some of the most innovative treatments in the world, Medicare's payment system imposes many barriers to innovations in using those treatments efficiently and effectively," says John C. Goodman, president of the National Center for Policy Analysis. "In normal markets, cost efficiencies and quality improvements mean larger net revenues when an entrepreneur finds a better way to provide products or services. By contrast, entrepreneurial efforts under Medicare all too often find their greatest reward when they exploit the system by finding ways to bill more for more services, rather than improve it."

Goodman says studies show that patients - especially those who are chronically ill - "can often manage their own care as well as, or better than, conventional physician care, and at lower costs, when given the support they need."

Now that Medicare's officially broke, what better time to implement real healthcare reform and let people pursue their own, natural, solutions?

Learn more: http://www.naturalnews.com/032452_Medicare_bankruptcy.html#ixzz1Mvx92xOP

It is o.k. to reproduce this blog entry as long as it is copied in it's entirety and not altered in any way.  For unbiased estimates or information regarding life insurance or fixed annuity savings account comparions; contact Randy Taylor below:

 Randy Taylor Financial Services
 Randy Taylor

 (916) 601-5270

Copyright, Creative Commons License, 5/20/2011

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KEEPING YOUR FINANCIAL ADVISOR OR INSURANCE AGENT HONEST

Article #2 in the series:  How to evaluate and compare an insurance company for financial strength.
Ask your advisor for a "Vital Signs Report" for any insurance company you are considering.

A "Vital Signs" report is an objective spreadsheet that summarizes and compares up to 8 insurance companies on 1 page; for several important financial safety criteria. This can help protect you from a biased or commission driven advisor from offering a company to you that is considered less than acceptable by honest and client focused advisors. You can even specify which companies you would like to compare.

What kind of information is on a Vital Signs Report?
First of all, 5 different and qualified rating agencies analyze key criteria such as the relative risk inherent in any insurance companies investment portfolios, asset growth, bonds in default and what types of investments the carriers are holding.

How can a layman interpret the results?  This is made easy for you.
Each of the 5 rating services assigns a percentile rating to each carrier on the report.
The 5 ratings are then averaged and assigned a composite rating known as a "Comdex percentile"  The higher the number, the safer the company is considered to be. My opinion is that an insurance company should have at least an 80% Comdex rating.

Aren't all insurance carriers about equal?
Not really.  The example attached shows for example, that Transamerica Life has a strong Comdex rating of 93%; an elite number;while the well known AAA has only a 60% rating.


Are there safeguards for doing business with companies licensed in California?
Yes, there is a California Guarantee Association that protects the consumer up to certain limits for life insurance and annuity claims; but an agent is not allowed to discuss that with you prior to a sale since it is considered unfair marketing.
In summary, you should not only expect your advisors to make product recommendations from companies that are competitive; you should also ask for a financial safety comparison of the specific company recommended versus other companies that your advisor has researched. The vital signs report is an industry standard that is recognized and used by the more diligent advisors.
This article is not offered as investment advice; but is offered as a tool to help the layman compare insurance companies for financial strength. 
A sample report is available by calling the phone number below and leaving your email address.
Randy Taylor
1(916) 601-5270

SAFE ALTERNATIVES TO BANK C.D. ACCOUNTS

I reported in the Gold River Community Newspaper earlier this year that:  "Yields for safe investments like c.d.s and treasury bills are down."  Smart investors that need safety, tax deferral, and probate avoidance are looking towards traditional fixed annuity savings accounts that feature higher before tax yields; and tax deferral until the money is spent or the owner dies. Current 5 year bank c.d. rates are under 3% with the interest taxed as earned. (Source:  Bank rate .com)
  The bottom line is that there are safe alternatives to traditional accounts that can offer higher yields even if your goal is to take immediate income.

5 year Guaranteed Annuities : These accounts feature a locked in rate for 5 years while the interest unlike a bank c.d. is tax deferred until received by the owner or a beneficiary.
The annuity owner can start spending the interest after 30 days; or defer taking the interest until retirement. Some companies allow a complete refund at any time. Consult your broker for a rate search comparison and advice. 

Indexed Annuities: These feature 2 different interest crediting methods within the same account:  1.) Interest is determined by yearly or monthly changes in an external index; such as the S&P 500.  Unlike a mutual fund; you cannot lose principal if the product is held until the end of a term; usually 7 to 10 years.
              2.) High Guaranteed interest crediting for income purposes only.  Some companies feature guaranteed crediting on a separate income account of as high as 7% compound interest with no fees on the income account at all.  that means a deposit would double for income purposes in as little as 10 years. These accounts charge around 1/2% fee annually on the first account if you surrender or re-invest the money. There is no fee against the income rider account which makes them ideal for IRA or other retirement monies.

Immediate Annuities:  These feature immediate guaranteed income that you cannot outlive; but on the downside are designed for income only and not as flexible as the other accounts above if you need emergency cash.  They often can be used as a vehicle for protection from creditors since you give up control of the principal in exchange for high guaranteed income.

In general, if you want safety, future income from existing assets, tax deferral, and probate avoidance; annuities of all types out perform most safe savings vehicles. This article is not meant to be taken as investment or tax advice and it is recommended that you always consult with an honest and capable planner, insurance broker, as well as your tax advisor or attorney while making financial decisions.