2012: The End is Near. Are You Prepared?

That's right folks. The end of the world. We are going to be done in by one of a number of scheduled calamities or some combination of them. Our prospects are not bright when you consider the fact that the Mayan Calendar comes to a sudden and abrupt end on 12-21-2012, when the earth finds itself aligned with the sun and a gaping hole in the center of our galaxy at the height of the solar maximum.

Not to mention that this time frame is cited in a number of apocalyptic texts, and there are asteroids we don't even know of hurtling towards us, and the geo-thermal cauldron is due for it's regular, every- sixty-five million-years-or-so explosion, probably under Yellow Stone national park, and the magnetic poles are due to shift.

Also, the History Channel has all but dedicated all of its programming to the subject, and of course there was the recent blockbuster movie delineating our various demise opportunities.

From so many angles, we are in for it.

What I do know is this: Catastrophe aside, the average lifespan for a US citizen is a healthy one that reaches into seven decades, somewhat longer than we would like to be working. And given the fragility of our financial markets and the frightening reliance of our blue chip stocks on credit, I am sometimes more scared of surviving the end. When it comes to our finances the end of life is not the true concern, it is the end of our savings. Every year it cost us more just to live the way we are accustomed to.

Armageddon or not, it is never too early or too late to take control of our monetary future and empower ourselves through financial awareness and education. The internet is endless and has allowed us to use the knowledge of others to transform the way we think and the way we make decisions. Take advantage of the resources available to you, especially when it comes to your retirement concerns.

Take some time to find ways to lock your retirement income tight and keep it growing guaranteed,View this chart to see what I mean.

About this Blog:

Understanding what is available to you is more important now then ever. Learn How to Retire is part of your educational journey and was developed to help you find the new Safe Money alternativesyou need to accomplish your retirement goals. In today’s economic environment one must realize that the only way to find success is through individual empowerment. Once you have taken the time to educate yourself you only then have the power to make the right decisions and put the trust factor on your shoulders. The more you know the more you will succeed.

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Fixed Indexed Annuities are growing in popularity because they make Sense

I was listening to this guy today. A pretty sharp guy, more or less, is what I thought as I took in what he was saying, until he started with the crazy talk. I can spot crazy talk pretty quick these days, when it comes to money. Listening to crazy talk cost me a healthy chunk of my retirement savings recently, and you know the saying, "Fool me twice..."; I tend to be on guard and on the lookout for crazy talk. (FYI, at the time, it was the stock advice from all the expert advisors.) So when this otherwise reasonable fellow starts telling me that it is madness to purchase an annuity these days because interests rates are going to fly and the market is going to boom, my crazy talk antennae go straight up. You know how I spot crazy talk. Crazy talk predicts the future. Crazy talk speculates and tells me what I need to do with my retirement savings. I don't listen to crazy talk. Neither should you.

Stop the madness, the crazy talker says: It is unwise to lock in for 5 years because some very smart people think interest rates are going to rise. Unless you desperately need to earn an extra two percent, keep your money in a money market account. Current money market rates are at 1%.

What kind of advice is that?

I'll tell you what kind of advice that is. It is unsound advice. Keep on earning 1% and don't earn an extra 2 percent where you can? What is left out and is important is the gains you earn with your annuity are tax-deferred. What else is important is this advice ignores inflation. If the recommendation is to keep your money liquid, so you can move it into a risky fund at some unspecified point in the future, or when CD rates or money market rates suddenly pay exuberant returns, the recommendation will only cost you money. I am reminded of something I heard recently: "Brokers are only finding more creative ways to lose you money". This is one of the most creative yet.

If you keep your money liquid by not saving it or putting it into a low return money market account, you are actually losing money to inflation. I point you to our last post about the importance of making sure your investment returns out-pace inflation.

If you put funds into a fixed indexed annuity, you benefit from market index growth, your principle is protected from the losses that many us of suffered last year when the markets went over a cliff due to the sub-prime mess (one of my IRAs lost 40%, and as you know, I was not alone), your returns out-pace inflation and your gains are tax-deferred.

What else is important is if you extend your investment horizon, you earn more. We are talking about retirement savings here. We aren't talking about casino money. You should be looking to lock it up longer so there is more income in retirement.

To provide more insight into the soundness of the FIA strategy, and the unsoundness of brokers' recommendation to avoid them, we will be turning again and again to history (markets, interest rates, policy) in this blog, because it is true that those who do not learn from it are doomed to repeat it. Our business is your financial security. We want you to learn from history (which is why our domain name is learnhowtoretire.com and not learnhowtogambleyourretirementsavings.com or learnhowtoloseyourretirementsavingsbylisteningtoyourbroker.com). We provide the history, and connect you to local, independent representatives that will advise you on how keep your money safe and create your own personal pension.

Retirement Planning is a Civic Responsibilty

I received this headline in my email today from a Financial News Subscription service: "75% of Baby Boomers aren't prepared for retirement." I get this sense that many folks now approaching retirement age are looking over the meltdown of the prior months with a kind of glassy-eyed wonder and disbelief. I also get the feeling that many of this number are in fact part of the group that the news subscription service identifies as not being prepared for retirement.

It is this group that has me worried. A recent study of American workers by the Employee Benefit Research Institute finds that only 13% of retired persons think they will be able to live comfortably on their retirement savings. The reverberative effects of such numbers can be staggering. Consider this:By 2030, spending for Social Security, Medicare and Medicaid will amount to almost 60% of the federal budget . This coverage is a good thing. But there is a tremendous risk that it will put future generations into a national debt and tax situation that is back-breaking. Strong individual investment strategies need to be hammered out now to prevent an untenable financial situation a few decades from now.

It is incumbent on all of us to be our own advocates in the face of difficult economic circumstances. It is important that we be stewards of our own financial security so that we are not simply transferring financial burden onto our heirs. There are sound and safe strategies that can be implemented today, and should be, to maximize retirement savings without sacrificing spending flexibility.

A large part of this discussion is to help people understand, they can still live comfortably throughout their retirement even though they have lost significant amounts of money due to the economic decline. The opportunities available for those approaching retirement have changed drastically over the years. Post and Pre retirees can continue to accumulate wealth for their estate and for themselves without having to experience any significant decrease in their retirement spending; with the correct application of guaranteed income riders available today.

An income rider pays out, without annuitization. This allows for more flexibility and access to emergency funds.

When you annuitize a contract you set a defined amount of income for a chosen duration of time without the ability of change. At the end of the chosen time period your funds have been completely withdrawal at a minimal interest rate. There for the trade-off for receiving this income is the loss of emergency liquidity and control. For instance, the amount of time you draw these funds cannot be adjusted. The amount of payment cannot be modified once annuitized.

Income riders allow you to exert more control over your income stream. You still have enough control to take more then the allotted income if needed. If you were to elect income from most income riders, the majority of your principal would still have the ability to be linked to a guarantee rate, an index or another form of growth potential unlike annuitization.

This alterative allows you to guarantee an income you can not out live as well as give you the opportunity for addition index linked or guaranteed interest rate gains.