One thing I have never abandoned is my willingness to learn – THANK GOD!  As a 28 veteran of financial services “advice giving” it would be easy to think that I have seen it all.  Over the years I have been to hundreds of training meetings, symposiums, conferences, webinars and schools to try to learn all I can about my job.  Through this process I have learned a tremendous amount of information and gained a lot of insight by networking with my peers.  However, the greatest source of valuable wisdom is: my clients.  By listening to them I have come to understand what is important to them. And, in the end, that is all that matters.

Stock Market Losses are Avoided with an Indexed Annuity

 I learned a very valuable lesson back in 2002 while talking to a client about her account.  She had been a client for over ten years and this was our first meeting since we had made a drastic move with her money one year prior to this meeting. We had moved her money from mutual funds to a Fixed Indexed Annuity.  Her question centered around the fact that her account value was the same then as it had been the year before. I reminded her that while the stock market had taken a drastic loss her money was protected from loss in the Fixed Indexed Annuity.  Her response: “So this is the worst conversation we will ever have?” Her response sounds innocent enough but it hit me like a ton of bricks.

You see, up until that time my idea of a bad conversation with a client was if they asked me why I did not make as much money for them as their neighbor had made. Or why we did not out-perform the S&P 500 or the Dow Jones Industrial Average. Within one 30 minute conversation I learned more about what my clients really want that all the training, etc. that I had experienced in my career.

Over the next few months I interviewed each of my clients and discovered their tolerance for account losses was much less than we originally thought. 95% of my mutual fund clients converted their accounts to Fixed Indexed Annuities.  Annual returns have ranged in the 4.75 -7% range. None of them lost a penny in the 2008 market meltdown.

Fixed Indexed Annuities have given them (and me!) peace of mind – which is number 1 on their list.

I enjoy writing about topics that concern retiring without worry. If you have a question that you would like me to address please email me at great@advisingseniors.com.

Jerry Rogers is President of Rogers Tax Advisory Group located in Charleston, SC. In his role of Personal Financial Trainer, has been assisting families for over 28 years.  Mr. Rogers started his career as an Account Executive at a full service investment brokerage firm and later moved into advising individuals as a Personal Financial Officer at a local savings bank.  He started his own independent Investment Advisory firm in 1988.  Jerry has published articles on retirement investing in the Charleston Post and Courier and has been featured in the Dow Jones Investment Advisor magazine.  Over 50,000 people have heard him on “WTMZ’s Senior Moment”.

If you are feeling overwhelmed by the issues facing most families: finding the best way to put your hard earned money to work, understanding how much you need to save for retirement, paying for college education, the best way to declare for Social Security benefits, how to properly fund your 401k, etc.,etc.,etc. I CAN HELP! Call me at (843) 552-5444 or send an email to: great@advisingseniors.com.

The New Retirement Math Gotcha Down?

Is this the new retirement math?

So you save your money until one day you tell the boss Adios! and live happily ever after.  The American Dream – right?  Oh, and of course you have your house paid for so no more mortgage payment!  So, let’s figure you have saved up a very tidy sum in your 401k and you feel confident that your $400,000 will provide a very nice living for you during the time you have left on this earth.  So you take a few weeks to lie around the house and get used to the “good life”.

Then you get your bank statement and realize you’re your old company is not depositing checks in your account anymore. So you finally get around to filling out the paperwork your old boss gave you on the way out the door. It seems you need to tell your old employer where you want the balance in your 401k sent.

So you go down to check things out at your local bank.  The bank you have been using for over 20 years. To them you are not just a number – you are a number with a comma in it! They tell you that they are currently paying interest at a rate of .6%. Six percent – great that means that your $400,000 will generate $24,000 per year. Put that together with your Social Security of $20,000 per year and (without a mortgage payment) you should be able to squeeze by.

Wait! The banker person is trying to say something to you but it is not really making any sense.  It seems that they are not paying 6% but POINT 6%. Wow! You are going to need the calculator on your smart phone to figure this one out.  $400,000 at .006 equals $2,400.  Well that’s just great! So to get $24,000 per year you need to get back down the old boss and beg for your job back because you need to work until you have $4,000,000 in your 401k.  But wait.

Now you remember that you went to some seminar somewhere along the way and they mentioned that the money in a 401k plan is taxed when you take it out.  So the $24,000 is really around $19,000 and that some of your social security is taxable because you are taking money out of your 401k. Ouch! The American Dream ain’t what it used to be. It’s the new retirement math.

I deal with this ALL DAY LONG! Believe me when I say that I enjoy practicing preventive medicine a lot more than Emergency Room type treatments.  If your financial picture looks anything like what I described above – please ask for help – if not from me then from someone. Get the facts and act. Don’t let the new retirement math prevent you from becoming independently wealthy!