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Take Charge of your Retirement in the Face of Market Volatility

Monday, February 17th, 2014 and is filed under Financial News, Financial Planning Blogs, Rebranding Annuities, Saving for Retirement

Stock Market VolatilityIt’s no secret that women tend to be under-served in the financial world. As a result, a woman planning for retirement today is less likely to feel she understands the ins and outs of the programs she is considering. Anyone in this situation – regardless of gender – is likely to make the same mistake: doing nothing for fear of making a mistake.

With market volatility on the increase, now is not the time to put on the blinders. Leaving the money you need to rely on for retirement income at risk in the stock market can be a dangerous proposition. You only have to look back and remember September and October of 2008, when the markets quickly dropped more than 30%, to see how quickly losses in the stock market can cripple a retirement plan.

Sticking your head in the sand, and your money in a CD or money market, is hardly a better option. You may have heard the phrase, “going broke safely” before, and it definitely applies here. When you put your retirement nest egg in a savings type account, you can expect to earn around 1% per year. With inflation at about 1.5%, you are actually in effect losing money while trying to protect yourself from risk.

What you need to know is a good retirement plan doesn’t have to be complicated. Fixed Index Annuities are a great option, and are actually very easy to understand. There is no trading or market timing involved, and your balance will be contractually guaranteed to never go down due to losses in the stock market.

A Fixed Index Annuity, or FIA, allows you to take advantage of growth in the financial markets, but your money is protected from market downturns. Once you lock in your earnings each year, your gains are also protected. You can never drag a good year’s gains into a bad year and lose them like you can in the market.

Fixed Index Annuities also offer a variety of options for when you are ready to begin drawing retirement income. Unlike a traditional brokerage account model that says you can only safely withdraw 3% each year in retirement, FIAs can allow you to take out 5% or more each year for life. No matter how long you live, your income is contractually guaranteed. Not only will you never run out of money, but some FIAs also allow your lifetime income to grow from year to year based on growth in the financial markets.

If you feel uncertain about your current retirement strategy, it’s time to get a second opinion. You may be surprised to learn how easy it can be to reach your retirement goals without risking your hard-earned money in the market.

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