How to Guarantee Safe Lifetime Income Payments for California Residents

Author: Randy Taylor, Copyright Creative Commons License 2011

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QUESTION:  Interest Rates are low. Would a Fixed Indexed Annuity, Savings Account give me guaranteed level income that is competitive with other safe savings vehicles like Municipal Bonds, Bank Certificates of Deposits, and others?

SOLUTION:  If your goal is clearly to take level income payments at retirement and you have other sources of liquid cash for emergencies; a Fixed Indexed Annuity can  make perfect sense; but in most cases an "Income Rider" is recommended. The income rider guarantees crediting towards an income account that can grow at a rate in today's economy by as much as 6% compound interest; guaranteed by contract. The income rider has caveats, so you will want to review a sample policy, all disclosures and also check with your tax and/or financial advisor. For example, this high interest crediting only applies during the accumulation phase and ceases after you begin to take guaranteed withdrawals.
Withdrawals can exceed the recommended payment at retirement; but would then reduce future payments. In other words, for income payment purposes; this is valuable but you need to learn the rules and play by them.



What is a Fixed Indexed Annuity?  A fixed indexed annuity in layman's terms is a savings account whereby the insurance company credits interest on an annual basis based on any upward changes in stock market indices such as the S&P index. In most cases the account "resets" yearly so that you do not have to recover lost interest if the market index you chose goes down. This is key in a volatile market.



Why add an Income Rider?:  An income rider is a separate endorsement or contractual addition which states that interest will be credited to a separate "Money Bucket" that grow at a predetermined rate. (6% compound interest or 7% Simple Interest with 2 of the most popular companies as of 12/20/2011.)  The key is that if you leave your deposit with the insurance company and take the payment dictated by the insurance company; you cannot ever outlive your income payments. The insurance company guarantees a lifetime income payment as long as you follow the contractual guidelines which are disclosed before purchase by contract.  Your income payments in today's economy can be as high as5 times that of the interest payment from a bank c.d. account for example. For details see your advisor or tax person.
Key features:  1.) Lifetime Income Payments:  Even in a situation with a term of 10 years, you can  take guaranteed income payments starting after only 1 year and get a very high income  payment guaranteed  for life if you have an income rider attached to the annuity product.
                         2.)  Unlike older annuities that used to require giving up access to your principal if you chose to start  guaranteed  income  payments; Newer indexed  annuities with income riders attached; allow you to cancel and take any cash that has not been spent from the basic accumulation account.

What are the downsides of an income rider?  Fees: There is a fee that is around  .75% with most companies. This fee reduces the  growth in the accumulation account that is available at surrender .  It also reduces the amount of  money available to the beneficiary at death due to the fee; but a good broker can put you in a product that waives the fees at death. Penalties for early withdrawal: There are penalties with all annuities if you take more than the free 10% annual withdrawals that the contracts typically allow. There are waived at death but  reduce affect your cash availability if you cancel early.  You will want to consult with your financial advisor and/or tax accountant or attorney before taking income or  cash from any annuity.

Advantages of an indexed annuity:
                                                        Safety:The principal has a minimum  interest guarantee which gives a consumer safety of principal if kept to the end of the term which can be 5 , 7, or 10 years in most cases.
                                                        Income  Tax Deferral: Funds grow  tax deferred until spent or death occurs.
                                                        Probate Avoidance: This is simple: There is a named beneficiary since this is similar to an insurance contract like life insurance and typically avoids probate without a  will or trust.

                                                        Lifetime Income Features: Money can be taken in the future as a single lump sum or in level payments that are guaranteed to continue for life.

*The above article is offered for comparison purposes and  entertainment only and is not meant to give legal, tax, or investment advice.  Please consult with your personal financial advisor including your attorney or tax advisor before buying an indexed annuity or investment vehicle of any type. Please also ask  for a statement of understanding and complete annuity contract sample related to any specific annuity offered to you by any advisor before purchasing any annuity.


Author: Randy Taylor, Copyright Creative Commons License 2011

https://www.facebook.com/RandyTaylorFinanciall

Linked in Recommendations:http://www.linkedin.com/in/randytaylorlifeandannuities
Life insurance and I.R.A. Account Specialist
Serving clients and brokers since 1983
(916) 601-5270
Ca. Lic.0643596

                                           

Market Volatility May Be Here to Stay

STOCK MARKET VOLATILITY LOOMS IN THE FUTURE

See what Jeffrey Kleintap, CFA for Lensco Private Ledger Says. Article link below:

 Jeffrey says: 

 " However, it is unlikely to be clear sailing for the rest of the year as volatility is here to stay"

My take:
Creative Commons License 8/3/2011
Randy Taylor, Author
Website:    http://finsecurity.com/RTaylor
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Life insurance and I.R.A. Account Specialist
Serving clients and brokers since 1983
(916) 601-5270

One of the top 5 money managers in the world now; Allianz SE, is holding 183% of their new premium dollars in short term instruments instead of buying over priced or junk bonds in order to keep their yields up.

What does this mean?  It means that when one of the largest money managers in the world gets conservative; it only supports what  is commented on in the article below. (click on link) I have been to the home office of  the two most popular insurance companies and money managers in the world and was able 2 years ago to talk to the actual actuaries of the company that own Pimco;  the largest bond portfolio manager in the world. What I found interesting is that the conservative companies like Allianz of North America weathered the financial storm about 3 years ago by holding cash instead of buying overpriced bonds while their competitors took larger risks.such companies had to actually refuse business at that time because they could not borrow money in amounts large enough to cover legal reserve requirements.

Please read :(also note the pie chart )

The solution: Contact your financial advisor, attorney, and/or tax professional for advice.

I personally specialize in IRA savings accounts that feature safety by contract guarantees.

See what Jeffrey Kleintop, CF at LPL  has to say about the markets expected volatility.

http://tinyurl.com/42uke87


Website:    http://finsecurity.com/RTaylor
Linked in Recommendations:http://www.linkedin.com/in/randytaylorlifeandannuities
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Serving clients and brokers since 1983
(916) 601-5270
Creative Commons License 8/3/2011  It is ok to copy or distribute this article as long as it is copied in it's entirety and not altered in any way.

The Sidney Smith Relief Fund and Comedy Tweet-up Fund Raiser Video

You can Still contribute with online donations to help raise money for the family of Sidney Smith, a young
child who had a serious bike accident; sufferred a traumatic brain injury that resulted in a coma.  A link will be provided for  those that missed the event with comedienne, Shayla Rivera; who came up from Hollywood to help.  IN this video, Cindy Rhoades , the event organizer and myself, acting as the M.C, introduce the program.

http://www.youtube.com/watch?v=wIcVL3UqmdM&hd=1

HOW TO CAPTURE DATA I.E., EMAILS FOR FREE

NEED A SIMPLE AND LOW COST WAY TO BEGIN AN EMAIL  MARKETING PROGRAM?     (Discover and use MailChimp)

" This simple and free application now has it's own Facebook application"

. It seems everyone is looking for great ways to increase the number of email addresses in their master list. MailChimp, a well known inexpensive-free email marketing tool, now has it’s own Facebook application. Once you sign up for your free MailChimp account, you are able to create your own opt-in page within the structure of your Facebook Page. You can either give away a free ebook or report, advertise your newsletter and much more. The best part is that you can promote this page, using the link, so that people are able to sign up without leaving your page OR Facebook. Everytime someone signs up, you get an email “ping” and MailChimp stores the email addresses in your MailChimp account. 

I think that this somewhat automated application has great value for those that want to create and maintain a database that can be used for email or video email programs in the future. If you are in sales and on a limited budget, this application can save you time while also creating a data capture system that takes little or no time on your part once set up. I think that this has great value for most and should be investigated and put into action immediately unless you already have a data capture system.
Please comment  on this blog entry.

Randy Taylor
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(916) 601-5270 

Creative Commons Licenese:  copyright Randy Taylor, Author 7/26/2011

You may copy this and distribute this article as long as it is copied in it's entirety and not altered in any way. 

How The Masters View Motivation

It is ok to copy and redistribute this blog posting as long as it is copied in it's entirety and not altered in any way. Copyright Creative Comments License 4/2011, Author: Randy Taylor, (916) 601-5270   June 25, 2011

The Masters Shown Below list their favorite Quotes regarding Motivation

On Overcoming Procrastination: Tony Robbins and  Nike said it Best:

" Just Step Up " : Tony Robbins
" Just Do It "     : Nike


It seems though, that anything I have personally accomplished has been a direct
result of focusing on a specific goal, with a time deadline attached.  Bruce Jenner also credited his Olympic Decathlon victory to setting a 4 year goal and  checking his goal list daily.  Take a minute and set which quotations the masters have chosen as the keys to motivation.

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QUOTES from the Masters... On Desire/Motivation On Experience "The best motivation is self-motivation. The guy says, 'I wish someone would come by and turn me on.'  What if they don't show up? You've got to have a better plan for your life." -- Jim Rohn "Desire is the starting point of all achievement, not a hope, not a wish, but a keen pulsating desire which transcends everything." -- Napoleon Hill "The only real limitation on your abilities is the level of your desires.  If you want it badly enough, there are no limits on what you can achieve." -- Brian Tracy "The difference between the impossible and the possible lies in a man's determination." -- Tommy Lasorda "Life is a succession of lessons which must be lived to be understood." -- Ralph Waldo Emerson "Experience is an asset of which no worker can be cheated, no matter how selfish or greedy his immediate employer may be." -- Napoleon Hill "Take time to gather up the past so that you will be able to draw from your experiences and invest them in the future." -- Jim Rohn "Develop wisdom in sales by reflecting on your experience, and learning everything you can from every call." -- Brian Tracy

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
Follow my blog :www.lifeandannuitysite.com
Website: http://finsecurity.com/RTaylor
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Serving clients and brokers since 1983
(916) 601-5270



 

HOW TO REVIEW REDUCTION IN INCOME TAX RATES

TEMPORARY REDUCTION IN INCOME TAX RATES EXTENDED:

Today's topic is the temporary reduction in individual income taxes.  If you would like additional information on this topic, please call my office at: (916) 601-5270

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Reduction in Income Tax Rates

Reductions in income tax rates in excess of 15% were scheduled to remain in effect through 2010, at which time they were subject to "sunset" provisions, meaning that income tax rates would revert to 15%, 28%, 31%, 36% and 39.6% after 2010.  The 2010 Tax Relief Act, however, extended the lower income tax rates through December 31, 2012. 

Income Tax Rates

Tax Years	Lowest Bracket	2nd Bracket	3rd Bracket	4th Bracket	5th Bracket	Highest Bracket
2011 - 2012	10%	15%	25%	28%	33%	35%
2013 and later	No 10% bracket	15%	28%	31%	36%	39.6%

Planning Note:

Consider using tax savings to fund an IRA, 401(k) or other tax-favored plan.

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10% Tax Bracket

The availability of the 10% bracket was scheduled to expire at the end of 2010, after which the lowest tax bracket would be 15%.  Thanks to the 2010 Tax Relief Act, however, the 10% tax bracket has been extended through 2012.  If "sunset" provisions take effect at the end of 2012, the 10% bracket will disappear and the lowest tax rate will be 15%.

10% Tax Bracket Thresholds

Filing Status	2011 - 2012	2011 and later
Married, Filing Jointly	$14,000 ($17,000 in 2011)	No 10% bracket
Single Taxpayers	$7,000 ($8,500 in 2011)	No 10% bracket

Brought to you by:

Randy Taylor

Randy Taylor Financial Services

Gold River Drive

Gold River, Ca 95670

916-601-5270

cycle.1@live.com

http://finsecurity.com/RTaylor

The purpose of this newsletter is to provide information of general interest to our clients, potential clients and other professionals.  The information provided is general in nature and should not be considered complete information on any product or concept described.  For more complete information, please contact my office at the phone number above.