Here is a synposis of today’s program:
Euphoria around Trump’s election and cabinet appointments. But the market’s very expensive just because interest rates have been kept so low. Look at market behavior: in stocks, trading volumes are very low. It’s just the traders swapping stocks among themselves trying to hit the magic number of 20.000 by year end.
Here are the facts: bond funds are down double digits since the election, but the inflation protected bond funds are up. That’s a sign that inflation’s headed up and why does that matter? Because where inflation goes interest rates follow.
Annuity myths: The big myth is that annuities are all high cost and high commissions. That’s not so.
- Variable annuities can cost you 4.5% or more every year off the top before you make a dime. That’s why we don’t use them. Fixed annuities are much cheaper, but interest rates are too low for you to make money today. Hybrid annuities charge you less than 1% annually and pay a guaranteed return that exceeds inflation.
- You don’t pay a dime for hybrid annuities purchased through Safe Harbor. Our contracts show you that every penny of your money goes to work for you immediately. Who pays us? The insurance companies pay independent firms like us because it’s cheaper than supporting a large sales force.
Pensions are definitely a good thing. But there is a dark side.
- If you are in the trades you may have a pension from your union.
- Is it safe? We have some clients who are welders in the Boilermaker’s Union. Theirs is an “endangered plan” — will the funds be there when you need them?
- And if you’re already taking a pension? Under federal pension law the Teamsters Central States Union pension fund is in a “critical” state. In May 2016 they sent a plan to the US Treasury to cut benefits to retired workers by 80%. Treasury rejected it as too optimistic!
- It’s not just union plans; the government says there are another 150 plans in critical condition and a further 80 which it calls “endangered.” Check your plan and call us. We may be able to help.