Should you hate annuities, or love them?

In today’s blog post and video, we break down how most annuities with all the fancy riders and big promises really work. Watch below to learn the truth.

Oh annuities…

If there’s one thing most financial experts are passionate about, its annuities.

And no matter if they love them or hate them, annuities always seem to drive controversy.

It makes sense, most of the marketing surrounding them is filled with misinformation and over simplified explanations that leave the consumer no better off than when they started. It’s like a magic trick. While they wave their right hand and make all the fancy promises they don’t show you what the left hand is doing.

We’re on a mission to change that.

At Ironwood we don’t love them or hate them. It’s about when they get used and how.

In today’s low interest rate environment, the internal rates of returns on these products can be pretty dismal even with all the riders and contract bonuses the insurance company is offering. So you have to be careful about what you buy and how it’s used for your retirement.

Let’s break an example down that sheds light on that subject.

In today’s video we’re going to break the basic types down then get into an example of why an annuity, in today’s environment, may not be the best thing for you.

Let’s recap:

    Annuities are usually broken down by deferred or immediate.

  1. Fixed and variable “deferred” annuities often come with Riders and other income provisions
  2. When they promise guaranteed growth rates the long term internal rate of return you can get over time is often glossed over.
  3. For instance: while you might get 6% for 10 years growing your “income value” to $160,000. That can leave you with a 5% guaranteed income rate of $8,000 a year. If you took $8,000 a year for 20 years after letting it grow for 10 first, your internal rate of return could be as low as .5%. Don’t let the long term interest rates get glossed over and do your research.
  4. Annuities perform the best in high interest rate environments which might not be happening any time soon.

Low interest rates are making retirement planning very difficult in today’s environment. Not only can fees eat you alive you need you need to avoid making emotional decisions. It’s up to you to go beyond “trusting” someone to help you. You also need to get proof and education on what strategies can work, how they can fail or backfire and what options you really have.

Annuities can be great and they can be terrible depending on your situation. But there are other options:

That’s why we created our free ebook.

It covers ways to drive income without relying on interest rates, annuities, or other high-cost and high-risk strategies all too common in today’s environment.

You can go pick up a free copy by using this link:

Like always, if you’re facing retirement and need a second opinion learn about what makes us different, we’ll audit your entire strategy to make sure you have the right tools to make your retirement as low risk as possible and still drive in a good income.

And if you want a further dive into some of the biggest risks with retirement planning then check out our webinar or download our ebook on taking income in retirement.

Will Interest Rates Stay Low Forever?

Are you losing money on your savings accounts and CD’s because of low rates and inflation? Then this video is for you.

Do you know how low interest rates affect you?

If you’re like most retirees or future retirees at some point you’re most likely going to have to drive income with your savings.

And in today’s low interest environment that can be tricky. When rates are low it not only becomes hard to drive a livable income from your investments, but in many cases, you can actually lose money in terms of purchasing power.

Losing purchasing power isn’t something many retirees living on a fixed income can handle and facing that burden can seem overwhelming. But we’re on a mission to change that and give you the tools to feel confident again.

If you’ve ever asked yourself:

Where interest rates are headed?

Will they stay low for the foreseeable future?

Can anything be done?

What are the risks?

Then this video is for you.

We’ll break down the current interest rate environment, what’s causing the situation and cover the pros and cons, so you can be more informed on your situation.

Let’s dive in:

Let’s recap:

  • Quantitative easing is all about driving up demand to keep interest rates low.
  • It’s being phased out over time, but we won’t know the long term affects until it runs its course.
  • You need to understand this environment because you don’t want to lose your purchasing power because of inflation.
  • It may be a good time to have a mortgage as rates are lower than they’ve been in a long time.
  • If you need income you have to start thinking outside the box as many “traditional” strategies aren’t working like they have in the past.
  • 2 dangerous products in low interest environments: fixed annuities and long-term bonds.
  • Make sure you review your long-term strategy to see what would happen if interest rates start to increase.

Low interest rates are making retirement a very difficult and tricky adventure for millions of retirees. When you can’t just live off of the interest you might be left wondering what strategies can help?

That’s why we created our free ebook.

It covers ways to drive income without relying on interest rates, annuities, or other high-cost and high-risk strategies all too common in today’s environment.

Like always, if you’re facing retirement and need a second opinion learn about what makes us different, we’ll audit your entire strategy to make sure you have the right tools to make your retirement as low risk as possible and still drive in a good income.

And if you want a further dive into some of the biggest risks with retirement planning then check out our webinar or download our ebook on taking income in retirement.

New Charitable Contributions Strategy For Minimizing Taxes Using Your Required Minimum Distributions

Did you know that the way charitable contributions are claimed for retirees is changing?

With the new tax plan in place, many people could soon lose the tax advantages of their charitable contributions.

Why?

Just check out this article: under the Trump tax bill, you’ll probably stop itemizing your deductions (http://nymag.com/daily/intelligencer/2017/11/under-the-trump-tax-bill-itemizing-deductions-will-drop.html)

But don’t fret, we have a strategy for retirees so they can most likely still get the tax deduction.

It all comes down to the way you take your RMD.

In this video we explain the strategy, so let’s dive in.

Let’s recap:

  • Remember this only works if you don’t receive the money directly,
  • Talk to your advisor and tax planner to see if this is possible for your situation.
  • If it is, make sure you coordinate your RMD with your custodian (who holds your investments) to tell them how you want your RMD’s distributed.

If the new tax plan has gotten you worried that it might negatively affect your retirement then we recommend you meet with your advisor and tax planner to see what options you have.

It’s better to know and have a plan than wait until it’s too late. So take action now.

Like always, if you’re facing retirement and need a second opinion learn about what makes us different, we’ll audit your entire strategy to make sure you have the right tools to make your retirement as low risk as possible and still drive in a good income.

And if you want a further dive into some of the biggest risks with retirement planning then check out our webinar or download our ebook on taking income in retirement.

Should You Pay Off Your Mortgage?

Do you know the consequences of paying off your mortgage in today’s interest rate environment? If not, then this video is for you.

If your starting to live off your investments or are approaching retirement, then you’ll most likely have wondered if it makes sense to pay off your mortgage or keep it in retirement.

While most of us hate being in debt, that doesn’t make it a straightforward question.

The problem lies in the current interest rate environment and the “cost” of holding money in an asset like a home vs. putting it to work to earn money and build wealth.

To help answer this question we’re going to cover when it makes sense to keep it or get rid of it.

As always, we’re on a mission to give you the truth about all things retirement-related in the Tucson area so this is something we’re not afraid to tackle.

Without further ado, let’s dive in.

Let’s recap:

  • Find out what your interest rate is vs. what you can earn in an investment.
  • Don’t avoid mortgages just for the sake of being out of debt. Weigh the pros and cons of your situation before you make your decision.
  • Get a good faith estimate on your home and see what options you have.

No matter the approach the question should be what interest rate will you be paying on your debt, how much of a tax break you receive and will that money earn enough to eclipse the benefit of paying down your house.

That’s why we advise that you talk with a mortgage professional, get a good faith estimate and then talk to your financial advisor about the situation so you can make an informed decision.

Like always, if you’re facing retirement and need a second opinion learn about what makes us different, we’ll audit your entire strategy to make sure you have the right tools to make your retirement as low risk as possible and still drive in a good income.

And if you want a further dive into some of the biggest risks with retirement planning then check out our webinar or download our ebook on taking income in retirement.

Are Hidden Fees Eating Away At Your Portfolio?

Do you know how much you’re paying in “hidden” fees? If not, then this video is for you.

If you’re an investor then you’ve most likely asked this ultra-crucial question at some point in your career:

“How much am I really paying in fees?”

The problem is that many fees are hidden, glossed over or exclusively hidden by advisors, banks or investment companies. Leaving you to wonder “what’s the honest truth?”

To help give you clarity, we’re going to cover the most misunderstood fees out there. And while many of you might already know about investment management fees, commissions or how much you’re paying an advisor we’re going to cover a few that you’ve probably never heard of.

As always, we’re on a mission to give you the truth about all things retirement-related in the Tucson area so this is something we’re not afraid to tackle.

Without further ado, let’s dive in.

Let’s recap:

  • Make sure you’re advisor fee is 1% or lower.
  • Understand what you’re investment management fees, internal expenses or expense ratio is.
  • Don’t miss the effect that your turnover ratio can have on your portfolio.
  • Understand that the larger the fund doesn’t always mean lower costs when it comes to market dynamics and “hidden” turnover costs.
  • And finally, make sure you understand how taxes work in each of your accounts.

No matter the approach or strategy you need to know every single possible cost that you face so you can avoid anything unnecessary.

That’s why we advise that you get a fee review with someone who can walk you through all the costs without trying to hide or gloss over the details.

The more educated you are, the safer you’ll be. But taking unnecessary risks because you haven’t done your due diligence? That’s not something we’d recommend.

Like always, if you’re facing retirement and need a second opinion learn about what makes us different, we’ll audit your entire strategy to make sure you have the right tools to make your retirement as low risk as possible and still drive in a good income.

And if you want a further dive into some of the biggest risks with retirement planning then check out our webinar or download our ebook on taking income in retirement.