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  • Ron Wills

Inside Track: 2020 Mid-Year Report

Updated: Aug 15, 2020

Pandemic, Civil Unrest, Trillions of Stimulus and 2020 isn't over yet.

In this Video Edition of The Inside Track, we discuss the state of the markets after the close of Q2 and take a look at how your 401k and Tax-Exempt savings plans have performed so far during this turbulent year of volatile markets, global pandemic and civil unrest.


If you aren't a current Client and your 401K just took a 25% loss, contact me today to find out how Tax-Exempt Savings can protect you from any and all future market losses while still getting you the growth you want. We will set up a 15 minute no-obligation call to discuss your goals.



Full Transcript Below:

I’m Ron Wills, CEO & Founder of Ultimate Income Advisors with the Mid-Year Edition of our “Inside Track” Report. Each quarter, we discuss news & events that affect your 401k and Tax-Ex Savings plans & and review how indexed products work and the many benefits they provide!


So as Q2 came to an end on June 30th, I’m pretty sure those of you still contributing to a 401k were thanking your lucky starts that MOST of your stock market losses from the crash had been recovered! Now obviously, this short recovery would not have happened without the 3 Trillion dollars of stimulus & liquidity the Feds pumped into the economy. And of course, the recovery was also helped by Wall Street’s optimism that the economy would get back on track this summer and resume it’s winning ways. But there’s still plenty of concern the economic rebound may not occur by year’s end and that will likely keep the markets volatile through at least the November election!


To find out how your retirement money has done so far this year, let’s take a look at the mid-year results of a 401k invested in the market and Tax Exempt Savings INDEXED to the market, both plans using the S&P 500 for growth.


Now keep in mind, that 401k YTD performance show gains or losses made between the first trading day this year (Jan 2) and the last trading day of each quarter. This differs from Tax Exempt Savings which calculates growth by comparing the ending value of an index this year with the beginning value of the same index from the year before. So when an index value ends a 12 month segment higher than it began a year earlier, you’ll be getting a gain!


Looking back to Jan 2, the S&P 500 began the year at 3245 and steadily moved higher until mid- February when the Wuhan virus attacked. The market’s immediate response was a WATERFALL drop of over 1000 points as 401k investors watched 31% of their savings disappear in just 4 weeks!


I’ll pull up a chart here so you can see how the 401k responded to the crash after trillions of stimulus dollars began pouring into the economy. Well the reaction was immediate and the markets quickly bounced off the bottom and trimmed the 31% loss to only 20% by the end of Q1.

Then as the S&P continued to move higher from April thru the end of June, 401k investors saw their losses narrow again to just 4.8% by the end of Q2. So how did Tax Exempt Savings perform during this same period?






Just by looking at this chart, you can’t see it but TES actually had a double-digit gain going from Nov last year thru mid-February 2920. But this gain was quickly zeroed out by the market crash which pushed the S&P Index down 399 points BELOW its starting value. And even though we didn’t get an interest credit for Q1, the “automatic loss protection” built into each of our indexed products worked PERFECTLY and saved us all from losing even one penny of our savings during this crazy quarter!

But the crash also had a BIG silver lining since it should give us a WINDFALL BONUS next Mar! This is because our CURRENT FIRST QUARTER segment (the one that started in Mar of this year and will end Mar of next year) RESET right at the BOTTOM of the crash and is now up a whopping 30%! So a lot of us ARE sitting on a potential double-digit payout but we’ll have to wait until next Mar to see how big it’s actually going to be. And if you’re not sure whether you’re one of these lucky folks, call me and we’ll check it out! Now back to Q2 results, we see that TES booked a 5.5% gain at the end of June. Remember, theses gains are now locked in, meaning the dollars earned from this 5.5% credit are now part of your plan’s accumulation value and CANNOT be lost during the next market crash!


In summary, it’s clear that the Wuhan crash made it pretty darn tough for investors to make much money over the past 6 months.! Even so, TES contracts with Minnesota Life and North American still managed to earn 2.75% average growth during this time and have a good shot at earning more during Q3 & Q4 later this year. i Now Allianz contracts ALSO made money during the past 6 months, averaging 5 to 7% gains with their payouts thru the end of June. But the big news from Allianz this year is that for the first time, you’ll NOW be able to lock in growth any time during a 12 month segment using your choice of the two most powerful indexes Allianz offers. This is an outstanding enhancement that will significantly improve your ability to lock in growth, especially during volatile markets!


Now for those of you still funding a 401k, I would imagine you’re probably giddy having dodged the Wuhan bullet with only a 4.8% loss! But you also have to be getting nervous about what’s going to happen after the next crash, knowing the REALLY BIG ONE is still waiting just up ahead! And with more employers lowering or eliminating the company match, does it really make sense to be exposing your NEW SAVINGS MONEY to stock market losses?


As we wrap up today, I’m going to answer my last question with a few more questions. Why aren’t you MORE fearful about future market losses SHREDDING your 401k and DESTROYING your retirement? And WHY AREN’T YOU putting as much money as you can into a plan that gives you 100% tax free income when you KNOW, income taxes WILL BE GOING THRU THE ROOF? And how about opting for a savings plan that you can borrow your OWN money at ANY time, for ANY reason, for as little as ½ of 1% interest? And aren’t you scared to death when you hear liberals OPENLY talking about CONFISCATING 401ks and putting YOUR retirement money into some Federal Savings Scheme? And last question, wouldn’t you rather have 2 to 3 X more lifetime, SPENDABLE income than you could possibly GET from an equally funded 401k?


Well, we sure don’t have to look very hard these days to see the MANY warning signs of impending financial trouble, there’re EVERYWHERE! HARD TIMES are indeed ahead and 401s ARE NOT the answer to any of the questions just asked. So isn’t it time to openly admit, these plans give you NO CHANCE of having a lasting retirement ESPECIALLY in the form-idable economic environment of today! But if any of you watching STILL don’t agree that your 401k is the disaster I’ve just described, then you owe it to yourself and your family to get confirmation from other trusted sources. This decision to stop funding and move away from your 401k is just too important and you’ve got to get it right while you still can! And if you do agree you can’t just sit there, you must DO something about it! Our team is standing by and ready to help by making it easy to divert 401k contributions into either your current TES or into an entirely new plan.


Each of our THREE Indexed Products were made for these times and you will be forever thankful that you relied on Indexed Savings plans to build tax free income that won’t run out during retirement!


Folks, our time’s up and we thank you so much for watching! Feel free to call, text or email to discuss any of the topics covered in our report today and remember, I’m always available for home or office visits and of course we can meet up on-line anytime.

So for now, you & your loved ones stay healthy, be safe and we’ll see you next time for our Q3 fall report.

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