Pension Accumulation vs Pension Distribution
Did you know that your retirement accumulation accounts {401k, 403b, SEP, IRA, Roth IRA, savings, etc.} were not designed for safe retirement distribution. And entrusting your retirement to the volatility of the markets means that your monthly retirement paycheck is subject to the 20% up and 20% downswings of the market. Even bonds and bond funds can have those drastic swings.
Volatility is not your friend in your Golden Years!
Dollar cost averaging works well when you are looking to average down the acquisition cost of your portfolio. And the same concept applies when you are withdrawing money from an accumulation based/volatility asset. The safe withdrawal rate is subject to a negative sequence of returns cycle. That goes like this… during up cycles, you’ll do fine. But during down markets your withdrawal percentage will be higher because you’re taking your funds from less. So, that means that you’ll be hit with a higher percentage from your assets. This will have a negative compounding impact on your money. First, that your portfolio is reduced by the down market. Second, you’ll have more to make up since you’ve taken a higher withdrawal percentage than usual.
Sequence of Returns???
So, the “Safe Lifetime Withdrawal Rate” of 4% that is proposed by advisors in Monte Carlo simulations is based on the notion that it is safe to withdraw from 4 – up to 7% annually with a 90% chance of running out of money at the age of 90. Well, that doesn’t leave time to enjoy retirement {25 Years}. That is the stuff of nightmares. What if…
…there is a better way. We can show you how to create your own ‘Perfect Personal Pension’ by turning your accumulation asset into an income that you cannot outlive no matter what happens in the market or the economy. This ‘Perfect Personal Pension’ continues to pay you a monthly income even if the asset value goes to zero.
With this time tested asset you get guarantees, growth and monthly income {withdrawal rates between 5% – 7% based on age}. Yes, it is the old fashioned annuity that creates your old fashioned pension. And because there is no cost to transfer or rollover your accumulation asset, all of your money goes to work for you immediately. Imagine being free from the worry of running out of money during your lifetime?
Respect for a lifetime of work!
And just a quick question, do you know what ‘Book’ you reside in the office of your financial advisor? Your advisor has 3 ‘Books of Business’; the A-Book – B-Book – and C-Book. Which ‘Book’ you’re in depends on your asset level. And the attention your portfolio gets depends on which ‘Book’ you are in. The A-Book {over $1 Million} clients receive the most attention and best efforts of active management. The B-Book {$500,000 – $1 Mil} clients receive cursory attention, perhaps a Christmas card in addition to quarterly statements, and passive management for an annual management fee {usually 1 – 1.5%}. This fee is charged to your account in up markets and in down markets… OUCH! Finally, there is the C-Book which gets inactive management and if there are any complaints during the year… well, you get fired. So, two more questions, what has your advisor done for you lately; and which ‘Book’ do you think you are in?
There is a better way for you to get the respect, attention and growth that you and your money deserve. You worked hard for your money and you deserve to have your money work just as hard for you in your Golden Years.
Let us show you how! Set your appointment or call now 314.403.9835.
