Winter 2003 Message
Winter 2003 Message
“Is there anyway to prevent my investments from dropping any further?” In looking at the past market cycles and economic downturns, we know that the best time to invest is when things look their worst. But what if things get worse before they get better? One could put their money in a bank, but certificates of deposit are only paying around 2% interest. What if you could get a guaranteed* return of 6% per year and still have the upside potential of a market recovery? You can, if you have at least a ten-year time horizon for your investments.
There are a few investment programs (variable annuities) underwritten by insurance companies that offer a guaranteed return of 6%, compounded annually with a few important restrictions. For example, most plans have a ten-year incubation period, which means that the investor cannot claim his/her guarantee until the account has been open for ten years. However, one can pullout their money anytime during the first ten years subject to possible surrender charges. One program has only a three-year surrender charge while others have a seven-year surrender charge period. The extra charge for the guarantee typically runs about 0.5%, and most programs offer a few dozen different investment options from aggressive growth funds to conservative income funds. After the ten-year incubation period, one is entitled to the greater of their actual account value (which is based on the performance of the investments chosen) or the 6% “floor.” So, no matter what, the investor will earn at least 6% per year, which begins accruing at the opening of the account.
If you would like to learn more about these programs, please contact Kevin at (425) 462-2980. We can either mail you information along with a prospectus or discuss the details in person. If you know of anyone else who may be interested, please have them contact us to arrange for a free consultation.
As always, if you would like to discuss your financial situation with us, please do not hesitate to contact us.
*Using guaranteed retirement income rider. Guaranteed retirement income riders have differing guarantee rates depending on the variable annuity chosen, typically contain higher internal fees, and have restrictions and limitations that vary from company to company and should be carefully reviewed prior to any purchase. Please read the prospectus carefully before purchasing a variable annuity or any other security.
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