5 Essentials For a Better Retirement #2 "No Market Losses"
Updated: Jan 28, 2019
This is the second in a series of articles covering the 5 Essentials For a Better Retirement. Essential #2 is something many people mistakenly believe can't be achieved: No market losses.
Not only can you achieve 'no losses', it's essential for your retirement.
Each of our “Indexed” Ultimate Income Products automatically protects our client’s principal, gains and time from market losses. The longest bull market run in market history will eventually end but in the meantime, why not bank most of the upside gains and avoid the down side risk?
NO MARKET LOSSES = higher distributions of income from “Indexed” products. Because cash value is always protected, our clients do not have to worry about taking a forced pay cut or having their account run out of money due to market losses.
MARKET LOSSES = lower distributions of income from 401ks. Recommended annual withdrawals are currently limited to only 4% of the account balance. Future market losses will lower 401k account values and 4% on the reduced amounts will force the retiree to either take pay cuts or risk running their account out of money.
EXAMPLE OF 4 % RULE: A $1 Million 401k retiree will end up living on just $28,000 a year after paying 30% taxes on their 4% draw. Then suppose a crash takes 40% (leaving $600K), cutting the net paycheck from $28,000 to $16,800. Future crashes will again cut the retiree’s paycheck and the account could go broke. Google “4% Distribution Rule” to learn more, the 4% doesn’t guarantee you won’t still run out of money.
More Annual Growth.
NO MARKET LOSSES mean TES can give you up to 2X more compounded annual growth(CAGR). All of our IUL contracts now have uncapped S&P 500 indexes so our clients get most of the big gains the market produces for 401ks but none of the losses.
18-Year Compounded Annual Growth Comparison: 401k Losses vs TES No Losses
401k Investors in S&P 500
- 5.09% TAXABLE CAGR 2000-2017
- 6 years of losses
- Losses cut gains by 50%
TES clients indexed to S&P 500*
- 10.85% TAX-EXEMPT CAGR 2000-2017
- zero losses in any year
- no losses resulted in doubled gains
Notice that TES had NO LOSSES during 2 market crashes and could have given you over 10% CAGR! Because 401ks were crushed in 2002 and 2008, those investors ended up with only 5.1% CAGR. And when this record setting bull market abruptly comes to an end, 401k investors will be hit again with big losses while TES investors are fully protected.
Estimated Retirement Income.
I’ve yet to meet the 401k investor who has ANY IDEA of how much income they’ll have when they retire. This is not surprising since 401k income cannot even be estimated since no one knows how much damage future market crashes will cause. However, future income for “Indexed” products can be accurately estimated since market losses are removed from the equation. You’ll also be able to determine today whether your current savings and future contributions will be enough to replace your working income so you can retire.
Peace of Mind.
If you’re fearful of being one market crash away from losing another chunk of your retirement savings, we have an easy fix! Each of our plans automatically provides market loss protection which means an end to losses now and no pay cuts or running out of money during retirement. And you can trust that our income projections are accurate, realistic estimates of the income you can expect to have in retirement.
Thanks for taking time to evaluate this information. The facts presented show that by eliminating market losses, you can start earning up to 2 times more annual growth than with your 401k. But this won’t happen until you proactively start diverting some of your 401k contributions into our Tax-Exempt Savings or Savings Replacement plans. You don’t have to replace your 401k, just don’t feed it as much.
Don't wait for another market collapse. Get protection from all market losses today! To get started, schedule a complimentary consultation or a screen-share on your home computer. See for yourself how 'No Market Losses' really can double growth and more than double your spendable retirement income!