Michael Clementi Highlighted in Broker World Magazine
As I look at my life, I realize how many things I need to have insured just to live in the United States. If you currently own a house or rent from somebody, you need to have renter’s insurance or home insurance. If you drove your car to work today, then you need to have car insurance.
Lastly, if you have young children and want to make sure they are taken care of financially if you pass away, then you probably have life insurance on you and your spouse. We rely on insurance carriers to provide a financial benefit if we ever need to make a claim. If we need insurance on all these parts of our lives, then why are we not putting insurance on our retirement income streams?
The foundation of our parents and grandparents’ retirement model was built on the income provided by social security and pension plans. The income stream was protected and guaranteed, while the risk was put on the employer and government to deliver on their promise. All our parents had savings accounts which portrayed the message of growing your assets and focusing on getting a good rate of return on your money.
With this advice, they would potentially go out and risk all their money in the stock market. If the market crashed and they lost a significant amount of money it would not be a concern to them because most of their retirement income was coming from protected sources. These clients could afford that loss and move on.
Unfortunately, this retirement model for our generation is currently broken and completely flipped upside down. Pensions seem to be all but gone (or extremely difficult to come by) and the retirement benefits from social security have dwindled down dramatically from what previous generations received. So where is the rest of your income going to come from?
The answer is you.
Most of the risk now is on you–the consumer–to make sure you have enough money to last throughout retirement. Yet, this directly contradicts the message we’re all being conditioned to believe: Continue to focus on growing your assets as much as possible and get the highest rate of return on your money.
I am here to tell you that the only way to have a successful retirement plan is to have an income plan that is guaranteed to life expectancy and will not lose any money to dips and fluctuations in the stock market. The strategy used to accomplish this goal is straightforward and used to protect and grow assets. It involves moving a portion of your money into a fixed indexed annuity (FIA) with a guaranteed lifetime income rider.
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