Index Annuity For Guaranteed Income???(2018)

Shhhhh….Keep This Between Us, Please. If word got out, I’d have no work.

Today’s post may be the most important you ever read because I am going to share with you the TWO things you need for a successful retirement.

Now, you still can have a successful retirement without these two things, don’t get me wrong.
But with these two things at your disposal you’re unstoppable.

What exactly are these two things? Well, let me share a story with you first that prompted me to write this email today.

A dear friend of mine and I were working on her retirement plan this morning. I’ve know this lady for over 15 years. That means I’ve known her longer than I’ve known 3 of my 4 kids. Now that’s a relationship if there ever were one.

Anyway, she is crunching numbers on what she should do to make sure she is good to go for retirement. Will she have to go back to work? Will she have to drop her cable plan? Sell her house?

Many Women Are On Their Own Financially

You know, the lighthearted stuff, that’s what she’s thinking about. And, unfortunately, like a lot of women, she has to tackle these topics on her own. (You should just see my Youtube channel. The comments will break your heart about what some ladies are having to deal with as they approach retirement.)

Now, as much as I’d love to say I’m so smart as was able to solve all her problems like a white knight, that simply is not the case. But working together we were able to come up with a wonderful plan that without question will see her through. And the amazing thing is, the plan is so simple, and full of so much common sense, she’ll be able to manage this on her own without any help from ole Josh. (Which is why I ask you not to share these secrets with anyone because I still need the work.)

Guaranteed Income = Anticipated Expenses

In a nutshell the plan is to have guaranteed income cover her anticipated expenses. That is the first key to a successful retirement plan. She thinks she’d live comfortably on $3,000 a month, let’s plan for Social Security, a small pension and an annuity to provide that to her. If her portfolio grows too, why that’s fantastic. But that’s just icing on the cake.

I bet some of you are even saying right now, “Whoa, she only needs $3k a month? That doesn’t seem realistic.”

No Debt Makes Retirement Planning Easy

Oh, but it is. And thus we have the second key to a successful retirement… no debt. The reason her expenses are so low is because her housing costs are almost non-existent due to the fact she has no mortgage. As I’ve said a million times if I’ve said it once, the number one expense for retirees is housing. NOTHING even comes remotely close. What makes one’s housing costs so high??? You got it, a mortgage payment! (Secondly is property tax which is why my top ten states for retirees to avoid all have high property taxes). But in this lady’s state, the property taxes are very low.

No Need To Rely On the Markets

No debt, guaranteed income to cover her expenses with a Cost of Living Adjustment in Social Security, and she is good to go. We don’t need to rely on any 4% rule now. Or what if the markets tank because of Trump or Obama or what have you. Should we move out of X stocks and into Y bonds, etc? All that is irrelevant now in her retirement plan discussions.

So, I ask you. If you had your expenses covered by guaranteed income how much better would you feel about your retirement? I can answer that for you, you’d feel great. As does this lady when together we came up with her plan. In fact, you could even hear it in her voice, the relief. And let me tell you, there is nothing a financial planner loves to hear more than the sigh of relief from a client who sees, maybe for the first, that he or she is going to be okay. Everything else is secondary and even tertiary.

How Would You Feel If This Were You?

You want to have a successful retirement? Then find a way to have no debt and your expenses covered by guaranteed income. And that, my friends, is the key to retirement.

In part 2 of my video series on Index Annuities, we tackle the guaranteed income options a specific annuity provides.

I’ll just cut to the chase, this doesn’t impress me. In the least.


Index Annuity Increasing Base Isn’t All It Seems

Because in this case, while they offer a 7.2% annual increase in the income base for the first 10 yeas, your income does not adjust with inflation after that!

What pays $10,800 in year 10 will pay $10,800 in year 30 PLUS you have no money left over to leave to your heirs.

“Walk Away” Money Vs. Income Base – a HUGE Difference!

You have got to understand the difference between the Account Value, what us professionals call your “walk-away money”, and your income benefit account.

They are TWO completely different things. And I don’t believe many investors are aware of the significant difference between them.

Your income base is solely the amount you can draw on each year for the rest of your life. You can NOT get a lump sum from this amount.

Your “walk-away money” is the amount the insurance company will cut a check to you for.

How Much Is Your Single-Life Income?

To determine your income amount off your income base, you need to know your age too and if you’re going to have a Single-Life income stream or a joint and survivor life income stream.

In the example this insurance company provides, a 69 year old, SINGLE life recipient will receive 5.4% a year off her income base account, thus the $10,800 previously referenced.

However, because she is taking well more out of the account than the annuity is growing, she has exhausted the cash value by year 11.

Now, she will continue to receive the $10,800 annually, but she has NO money left in the account!

Is that made clear to the potential purchasers of these products? I don’t think it is.

And it should be.

Look, I’m not saying you should NEVER buy one of these things.

I’m just saying you need to understand what you’re getting into.





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