Does the current market downturn have you worried? We know these are challenging times and thought we would reach out to let you know you have resources in your corner to help stabilize your retirement income avenues. Here are a few things to consider when the market is in a downturn:
CORONAVIRUS/COVID-19: A FEW KEY FINANCIAL PRECAUTIONS YOU SHOULD HEED RIGHT NOW We are in the midst of unprecedented events. Air travel banned from foreign countries. Non-essential traffic halted at the borders. School systems shut down for the remainder of the school year. Mandatory quarantines. While precautions such as these are certainly necessary and will undoubtedly save lives, they will also very likely result in continued economic upheaval and market volatility. This impacts you and every other American preparing for or currently living in retirement. In this environment of anticipated continued volatility, here are a few key items you may want to consider regarding your retirement assets:
1. ALL-TIME LOW INTEREST RATES On Sunday, March 14, 2020, in an effort to stimulate the economy, the Federal Reserve dropped interest rates to 0- 0.25 percent.* While historically low interest rates may be positive for the economy, they often create challenges for conservative retirees using fixed interest financial vehicles in their portfolios. If you have money sitting in any of these fixed interest options – Certificates of Deposit (CDs), money markets, treasury bonds or traditional fixed annuities – now may be the perfect time to take another look at your current retirement income plan and see if there are any alternatives that it makes sense for you to consider. Why? Because there are still some products available which may provide you with meaningful interest rates. Given the financial and interest rate environment we’re currently in, it is likely that the interest rates on these options are likely to change in the near future.
2. THE NEED FOR GUARANTEED INCOME For retirees, market volatility can be more alarming to those who aren’t currently depending on the market for income. Stomaching market volatility – at least with some of your assets – can be more bearable if you have a significant portion allocated into a source of guaranteed income, which Fixed Index Annuities (FIAs) can provide. FIAs are deferred annuities that offer complete principal protection from losses caused by dropping markets. They offer interest credits based in part on the performance of a market index (because your money is not directly invested in the market) which affords you the opportunity to participate in some of the market gains, while also providing protection from losses when the market falls. In some instances, these annuities are even available without any fees. Once you are ready, you can convert the annuity into a reliable stream of income – contractually guaranteed for the lifetime of you and your spouse. In other words, you will never have to wonder or worry about “paychecks” in retirement again.
IN SUMMARY With all of this said, please take heart. We are fully confident we’ll get through this, and things will return to normal. Whether thinking back to 9/11, the market crash of 2008 or other crises our country has faced, we are a resilient nation, and we will emerge on the other side of this.However, just like everyone is doing with their physical health right now, we URGE YOU to be taking NECESSARY STEPS to maintain your financial health as well. If you aren’t currently 100 percent certain of the path you’re on, please contact us at 856-203-6911 and ask for Tina in scheduling or click the link below to set up a phone appointment with a member of our team today!
*At Maisch Financial, we are set up to operate virtually – allowing you to meet with us by phone or webcast from the comfort of your home rather than coming into our office. Even if you don’t fancy yourself “tech-savvy,” we can make things incredibly simple, so don’t let current social distancing procedures keep you from making important financial decisions! We’re here to help! Contact us now at 856-203-6911 and ask for Tina in scheduling or CLICK HERE to schedule a phone consult!
*Source: www.washingtonpost.com/business/2020/03/15/federal-reserve-slashes-interest-rates-zero-part-wide-ranging-emergency-intervention. Accessed 3/19/20.
Insurance and annuity product guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Fixed index annuities are designed to meet long-term needs for retirement income. They provide guarantees of principal and credited interest, subject to surrender charges and a death benefit for beneficiaries. Annuities are not bank or FDIC insured. 3/20-1123710B