WaterStates Financial represents the very spirit of America in helping our clients save time, effort and money by helping clients build, protect, and preserve their assets so they have financial peace of mind and security throughout their retirement years.
WaterStates Financial is a leading online provider of fixed-rate, equity-indexed, and immediate income annuities.
Disclaimer: The information on this site is provided for discussion purposes only, and should not be misconstrued as investment advice. Under no circumstances does this information represent a recommendation to buy or sell securities.
Retirement in your golden years goes much more smoothly when you’ve planned ahead with savings and investments.
As most people found out during the bear market and the Great Recession, managing your investments is a lot more complicated than merely picking stocks or mutual funds.
The financial realities of our world are changing. More and more people need to rely on their own investments for income during retirement. The assets from which you expect to create a vital stream of income during your retirement face risk from economic turmoil, interest rate uncertainty and market volatility.
Retirement planning has three steps – accumulation, preservation and distribution. In accumulation stage you invest in different investment products based on your risk profile and time horizon towards retirement. Preservation and distribution stages go parallel to each other and these stages come after getting retired. In these stages the main goal of investor is to preserve the amount accumulated and also keep on getting some income out of it to take care of retirement expenses.
It’s a universal concern: No matter how much you have accumulated, everybody is worried about making their money last through retirement. A recent survey found that more than half of baby boomers fear outliving their savings more than they do dying. Fortunately, making a few changes to your financial situation now can help increase the chance that your savings will last your lifetime — no matter how long it spans.
Warning: Many future retirees and present retirees have not taken in consideration the impact that “Uncle Sam” will have on the income from your 401(k), 403(b) or IRA accounts. Uncle Sam owns up to 30-, 40-, or even nearly 50-percent of your account value. If you have not started taking distributions yet you probably don’t realize the impact this will have on your actual retirement income. Uncle Sam doesn’t start taking his “cut” until you start withdrawing money from your account. Then it’s time for you to pay up. To pay up all those taxes you were previously told had been “saved,” as well as all the tax now due on the accumulation.
It is my belief that just as you want a high probability of getting to your destination on an airplane, you want a high “success probability” in never outliving your money. Such strategies may include a portfolio of fixed-income annuities that transfer the risk and uncertainty inherent in the stock market to life insurance companies.
The problem with just seeing your 401(k) as a single five-digit, six-digit or even seven-digit figure is that it creates what economists call “the wealth illusion.” People look at their 401(k) benefits statement and see they have 60,000 bucks in there and they think they’re rich.” But $60,000 won’t provide much spending money in a retirement lasting 20 or 30 years.
The lump sum in your 401(k) may seem like a lot, but when you translate it into a monthly income stream over 20 or 30 years, it may not be as much as you think. Breaking it down into how much the money will provide will give you a much better picture of how much you’ll have to spend in retirement.
As you move from asset accumulation (saving money for retirement) to income distribution (spending money in retirement), positioning your investments to provide a primary income that lasts as long as you need becomes more complex and difficult to manage.
Annuities are one of the only guarantees that you can get in life. An annuity is a continuing payment that has a fixed annual amount. Annuities can exist for a specific period of time, or they can last a lifetime, but the bottom line is that you have that income when you need it.
Fees or Charges: The annuities we offer have no fees or charges – they are a spread product, which means the insurance company has to make more money than what they are paying in order to make a profit. Any “loads” are part of the pricing of the product. You will know exactly how much you will receive for the stated period of time and the premium you give them.
Annuities are becoming increasingly popular amongst retirees due to the recent stock market crash. Many seniors, especially those approaching retirement, received quite the shake up when confronted with plunging 401(k) values during the recent market downturn.
Even though the market has since recovered (and then some), many remain concerned that another crash could come just when they need the money, a couple years into retirement. As a result, some seniors have been turning to annuities for income stability.
The real secret is to avoid making disastrous mistakes that seriously erode the value of your portfolio and make it hard for you to recover, especially if your are approaching retirement or are already retired.
The financial consequences for individuals of not getting the best possible deal can range from simply missing out on thousands of dollars of income, through to leaving a spouse destitute.
Selecting a retirement income comes in two parts. First the investor has to select the right type of income, including drawdown, joint or single life annuities and any underwriting which might qualify them for extra income.
Life is like 18 holes of golf. On the Front 9 you accumulate wealth and on the Back 9 you take it out…..and, while not everyone will live to 90, we are living longer in retirement than our prior generations. As a result preparing for the Back 9 needs to be a priority in our life.
A secure financial future is about more than just reaching a destination. Preparing for it should be like taking a voyage and having positive experiences along the way.
The overall goal for retirement is to develop reliable sources of income that cover your living expenses for a good life, no matter how long you live and no matter what happens in the economy.
Annuities can be useful in financing retirement. Your retirement income plan is probably the most important investment decision you’ll make in your life. Thanks to advances in healthcare, retirees are living longer than ever – sometimes stretching their retirement out 20 years or more. Living longer, healthier lives is certainly an exciting proposition, but ensuring that your retirement savings will last 20 to 30 years, and possibly longer, is the challenge.
Retirees can more easily visualize being run over by a bus than they can being old and without income. In this regard, people may underestimate their life expectancies, calibrating it from birth rather than from their current age, and not realizing that they may live significantly longer than average.
You can’t predict your life span, your total retirement spending or your future investment returns. But you can predict with relative certainty your basic retirement expenses, such as utilities, food and clothing, as well as the amount of income you’ll receive from guaranteed sources, such as Social Security, pensions and annuities.
Match your essential retirement expenses with your guaranteed income sources, and you’ve gone a long way toward building a more secure draw-down strategy—without relying on any rules of thumb. A secure financial future is about more than just reaching a destination.
The Golden Touch: Knowing how to make money, knowing what to do with money once you have it, knowing how to keep people from taking your money away from you, knowing how to keep your money for the long term, and knowing how to make your money work for you- is of vital importance in the quest to achieving financial freedom.
Most people recognize that liquidity, safety, and growth do not co-exist very well. Usually investors are compelled to make one of two choices, either they give up a degree of safety in exchange for a greater potential for growth or they accept less growth in exchange for a higher degree of safety.
The major risks facing seniors today are:
- Market risk—The ongoing volatility in the stock market
- Inflation risk—The erosion of one’s purchasing power
- Longevity risk—The increase in life expectancy – The majority of seniors feel that outliving their assets — is the greatest risk they are facing.
- Long Term Care – The second greatest risk seniors are facing.
Long-term care costs continue to rise, many times keeping the costs and more importantly, the needed care out of reach for the individuals who need the services.
- adult day care costs rose 6.56% to an average daily rate of $65.
- nursing home care private room costs increased 3.6% to $230 per day/ $83,950 per year.
- nursing home care semi-private room rates increased 3.3% to $207 per day/ $75,555 per year.
- home health care costs have remained relatively flat.
- Assisted living care costs increased 4.55% to a national median monthly rate of $3,450.
As you can see the high costs are staggering and increasing each year. It is vital that everyone think about long term care early enough to prepare for the unpredictable future.
The increased volatility in the markets and negative outlook justifies more investors looking towards an equity indexed annuity. Annuities offer better solutions that help customers balance the risks they should be worried about at retirement – longevity risk, inflation risk, investment risk and long term care risk.**
Market Volatility Risk is a Concern: Markets don’t always go up, and if the first year of our retirement coincides with a market crash, the future doesn’t look so bright. “Austerity” is the name we give to the situation where a retiree has to limit their spending during an economic downturn or recession. Which is somewhat like complaining that the roof is leaking because someone else hasn’t fixed it.
Euphoric gains always lead to hangover pains – it’s just a matter of when. This is the first time in recorded history where nearly all the central banks in all countries are pumping out lots of money, debasing their currencies, printing money. I’ve never seen this in history, and now we’ve got everybody – or nearly everybody – doing it. This is artificial!
There are signs of worry, you do see breadth sort of changing. You do see potential problems, [like] volume problems. [Although] this is all artificial, that doesn’t mean artificiality can’t go on for a while,” “Remember the dot-com bubble of the “90s … you can look back on any bubble and things … can certainly last longer than any rational person can expect.
And those policies could also cushion any sell-off – leading to a situation described in the past as a “slow-speed crash” for the markets, and for the broader economies. Economists refer to this situation as a “race to the bottom.
Don’t put all your eggs in one basket. “Stock Market Crash Insurance”. Equity Index Annuities are simply very ingeniously constructed retirement savings vehicles that took the principals of traditional fixed annuities and applied the aspects of growth associated with equity investing, thus providing savers and/or investors higher potential returns without ever exposing their principal to risk.
The fundamental value of these accounts became quite apparent during the rapid decline in the market, when the indexed annuity not only retains the original capital but also keep its interest, and profits of the previous years.
Thus, Fixed Index Annuities have the similar levels of safety of typical savings vehicles like CDs and money markets, yet have the potential the higher return potentials that one would associate to equity style investing.
Often, people may be thinking about annuities framed in terms as a gamble on the possibility of a long life, rather than as a risk reduction measure aimed at improving that possible long life. With your income guaranteed forever you can rest assured that your retirement will be safe and secure. If you invest in a way that, no matter what, your basic income needs are covered you never have to worry about the markets ups and downs ever again.
Our mission is to assist our clients in reaching their financial goals by providing quality financial services and creative, intelligent solutions to their needs. Financial planning is an important step that everyone should take, whether they are young or old, male or female. Taking the time to sit down and think about your money and how you will live within your means today and into the future can help you to a more comfortable future.
WaterStates Financial is an independent educational, and retirement marketing group specializing in annuities and retirement income. All material presented herein is believed to be reliable but we cannot attest to its accuracy. Opinions expressed in these reports may change without prior notice.
We make finding the best such annuity/insurance the easiest job in personal finance…It pays to shop for the best value and a strong insurance company.
You can buy the annuity/insurance directly through our company and we will answer your questions and handle your order by phone, email, at our/your office, or if you prefer, your home.
360 Phyllis St. Big Lake, MN 55309
**Hybrid Annuity Policies are designed to provide long-term care benefits during your lifetime.