1)      What if….Your retirement account had an income account value guaranteed to grow at no less than 8% annually – ON TOP OF a 10% bonus credited to all first year deposits for up to seven years?  (So….$100,000 turns into $110,000 on day one and then grows at no less than 8% annually for future income)

 2)      What if…..You could have safety and opportunity on the same dollar at the same time?

 3)      What if….Your principal protected retirement account had demonstrated the potential to capture a 53% annual return during one of the most challenging financial cycles we have ever experienced?

 4)      What if….Every year the market went down, you could demand your money back, and then reinvest at the lower price?

 5)      What if…. Your account would automatically capture a percentage of the upward movement of the market without any funds needing to be liquidated? 

 6)      What if…. Your principal protected, market linked account not only GREW TAX FREE, but provided TAX FREE CASH FLOW that never even appeared on your tax return?!?!

Sound too good to be true?  The simple truth is – you don’t know what you don’t know.  At the Singer Financial Group, we work with successful people who choose to know.  What about you?  Are you ready to take the guess work out of retirement and income planning?  Come see us.  We’ll show you how to implement the Five Keys To Financial Longevity.

And….Beware those who think the worst is past – Check out the Financial Times article dated Aug 30^th, 2010.  This is based on a paper presented at the Jackson Hole Symposium in Jackson Hole, Wyoming, where central bankers gathered at their annual conference last week.  Ignore these economic realities at your peril.

This particular illegal SEC land grab began in 2008, when then chief Christopher Cox announced his agency would regulate fixed indexed annuities. These niche products, like traditional annuities, guarantee buyers a return of their principal and a certain level of interest. The bonus is that they also earn interest on the upside performance of stock or bond indexes. If the S&P 500 goes up, the annuity holders profit. If it falls, investors still get their principal and interest.

Fixed indexed annuities have long been treated as insurance products, subject to strict state insurance regulation. Yet Mr. Cox and his merry band argued that these annuity products ought to be considered “securities” (and thus under SEC purview) because they involve market “risk.” Never mind that the only risk to investors is that they might make more money than expected.

The SEC’s rule, which passed in December 2008 on a 4-1 vote, required annuities to be registered with the SEC and sold by registered broker-dealers, rather than insurance agents. This was a slap at state insurance commissioners, particularly because the SEC couldn’t provide a legitimate reason that states should be robbed of their regulatory authority. A coalition of insurance commissioners sued, as did the insurance industry. Current SEC chief Mary Schapiro could have pulled the plug at that point, but true to her history she plowed ahead in court. (See our editorial, “The SEC’s Annuity Grab,” March 7, 2009.)

Lo, the D.C. Circuit Court of Appeals last week threw out the rule in its entirety, noting it was arbitrary and capricious given existing state oversight. And in case the SEC didn’t take that hint, Congress included a provision in the new financial regulation bill that more or less bars the agency from regulating these products. Even Democrats decided this SEC power grab would serve no purpose other than to make fixed indexed annuities more expensive, and cost their home state insurance industries jobs.

Perhaps now, the SEC can focus on the securities industry, and figure out a way to bring consumer awareness and transparency to an industry that ignores the need to protect principal when it comes to retirement and income planning. I know – that is more than we can hope for – in fact, it’s just not possible. It’s the nature of the beast.

I’m proud to focus my practice on the protection of principal AND income solutions. Providing safety and opportunity, on the same dollar at the same time. Wow! I’m so thankful that these powerful and innovative SAFE MONEY solutions continue to be offered and regulated as insurance products. Why? Because insurance companies manage risks – they don’t take risks.

These insurance products allow the Singer Financial Group to remain true to our mission; We show you how to never lose money, and never run out of money in retirement!

 
The Five Pillars of Safety:

1. Legal reserve system
2. State guaranty funds
3. Reinsurance
4. Holding companies
5. Strict regulatory investment practices

Legal reserve system
The insurance industry has gone to great lengths to assure the safety of annuity investments and to establish consumer confidence. An insurance company must be able to handle the unexpected, hence the institution of the legal reserve system. The reserve system specifies a dollar amount that the insurance companies must keep in reserve, and this solvency ratio can be likened to a client saving cash for a rainy day. How the reserve amount is calculated varies from state to state, and, as with all insurance matters, it involves adequately predicting and balancing risk.  Insurance companies invest these reserve funds in investment grade bonds, US treasury bills, and government backed securities in order to provide these underlying guarantees.  Insurance companies avoid or manage risk – they don’t take risk.  (Please see holding companies for a solvency ratio example).

State guaranty funds
The purpose of state guaranty associations is to provide a mechanism for the prompt payment of covered claims of an insolvent insurer. (To date, no one has ever lost a penny of their principal in a fixed index annuity, nor has anyone in America ever failed to receive the full death benefit on a life insurance claim).  This safeguard exists so that a catastrophic financial loss to certain contract and policyholders may be avoided. These guaranty associations make assessments to obtain the funds to pay claims if an insurer becomes insolvent. Each state has a guaranty fund or association www.inlifega.org that assumes the claim payment responsibilities for insolvent insurance companies.

Reinsurance

The definition of reinsurance is insurance purchased by an insurer.  In many states the Department of Insurance requires insurance companies to reinsure one another before they can offer their products in that state.

From a global perspective, Swiss Re is one of the world’s leading reinsurers and the world’s largest life and health reinsurer. A global expert in managing capital and risk, Swiss Re’s objective is to anticipate, identify, and understand industry developments that shape the future risk landscape.

Basically, reinsurance companies can absorb some of the capital strain associated with writing fixed annuity business, including both statutory reserve strain and target capital strain.

Holding companies

As you may already know, many insurance companies are not domiciled in the United States. Rather, several insurance carriers with North American headquarters located in the United States are part of a larger parent company.  There are numerous examples, but let’s look at two – Allianz Life Insurance Company and Aviva Life and Annuity.

Allianz’s parent company is Allianz SE, which is headquartered in Germany. Allianz SE has more than 75 million customers in about 70 countries, employing 150,000 people worldwide.  Allianz SE has generated more than $64 billion dollars in equity-index annuity sales, and is the 14^th largest corporation in the world and the 3^rd largest money manager.  Allianz’s solvency ratio is 161% (meaning that for every dollar on deposit, they have $1.61 in reserve – vastly different from the banking industry, where reserves are always less than deposits – hence the need for FDIC).
Aviva plc is the 5^th largest insurance group in the world with $573.8 billion in funds under management, 50 million customers and 54,000 employees worldwide.  Aviva has been delivering on it’s promises for more than 300 years, since 1696.  Over the years Aviva has insured Sir Winston Churchhill, Queen Victoria, and turned down Napoleon Bonaparte.  The rest is history.

These examples simply demonstrate that insurance carriers have parent companies with deep pockets to ensure safety to their consumers’ diverse portfolios.

Strict regulatory investment practices

The basis of the regulatory investment practice is to show how financially stable one company can be with its investments. They base that stability upon their solvency, which is the company’s assets over liability. This allows the company to meet all obligations as a client’s financial payout becomes due. The results are based upon a rating that shows just how stable a company really is, usually based upon AM Best or S&P 500 standards.

An annuity should be defined as a safe and secure compounded growth instrument, guaranteed on a tax-advantaged basis with the ability to capture stock market-like returns without the risk to principal or prior gains.

If you could have purchased an FIA every month, beginning in August 1929, your average annual index annuity return for the Great Depression would have been 6.4%.  All of this during a decade that ended 65% lower than when it began.  *Jack Marrion, President of Advantage Compendium, Ltd as quoted in Senior Market Advisor – July 2009  (www.safemoneyplaces.com)

For additional information and resources regarding money you can’t afford to lose, go to…                     www.safemoneyplaces.com

When prices in a financial market go from Sea Level to Outer Space in a relatively brief time, two scenarios are at work — and they both start with the letters “B-U.”

When a precious metal goes from being a popular long-term investment of buy-and-holders to the quick, get-away “vehicle” of day-traders, two scenarios are at work — and they both start with letters “B-U.”

And when the majority of mainstream pundits see a “new paradigm” in which prices continue to rise indefinitely, two scenarios are at work – and, you guessed it, they both start with the letters “B-U.”

Enter: the recent Gold Rush of 2009, when ALL of the above conditions apply. Everyone from hedge funds to housewives now hustle to hitch their asset wagon to the rising gold star. Which begs this question: Which of the possible two scenarios are at work: B-U-ll

— Or B-U-bble?

Here’s the difference: A genuine bull market is driven by a self-sustaining internal dynamic that’s reflected by a host of technical indicators. A Bubble, on the other hand, is the result of untenable psychology that could shift at any moment and bring prices plummeting down.

It goes without saying into which category the mainstream experts put Gold: namely, a new bull market that has years, if not decades more to soar. “Gold Will Hit $2,000 an ounce,” reads an October 8 Market Watch. And — “Gold Has More Upside… The metal’s bull run is just getting started,” adds a same day Barron’s.

 I found hundreds of news items which agree about the long-term potential for gold’s uptrend. But not a single one could tell me why the rally would continue, other than because the experts say so.

To know whether a diamond is real, it must cut glass. And, to know whether the bull market in gold is real, it must encompass at least one of these FOUR traits: 

1. A surge in demand that outpaces supply
2. A falling stock market, which raises the “safe haven” appeal of precious metals.
3. A real (not imagined) threat of inflation
4. An increase in value relative to major foreign currencies

Right now, the Gold market can NOT check off a single one of these items. Case in point:

 Supply: Demand for gold from jewelry makers – which comprises 60%-70% of the market – has plummeted to its lowest level in 20 years.

 “Safe haven” appeal: From its March 2009 bottom, the U.S. stock market has soared 50% right alongside rallying gold prices.

 Inflation:  An increase in money supply is only inflationary if it is used to RAISE the total amount of credit. This is NOT happening, as both bank credit and consumer credit levels are contracting for the first time since World War II.

 A gold rally in other currencies: Again, the October 2009 EWF F presents a close-up of Spot Gold prices VERSUS Gold denominated in foreign currencies such as the Canadian dollar, the Australian dollar, the euro, franc, pound, and yen since 2007.  The major non-confirmation between these two markets is clear, as is the overlying message: IF demand for gold truly outweighed supply, then its value as measured in other currencies would increase.

 The rise in gold is primarily the result of speculation and a falling U.S. dollar. These are exactly the “untenable” forces that contribute to a Bubble, not a genuine Bull market. The difference is only a matter of time.

Or is it really to capture a gain? What value are unrealized gains that at some future date due to the cycles of the market are taken back?  How do you capture a market gain?

You need to sell your funds.

But now the dilemma is – How do you continue to benefit from the performance of the market if the dollars are no longer in the market?

Wouldn’t you have to re-enter the market?

But now you may be un-realizing your gains.  Right?  If you put previously captured gains back into the market they could be lost.

How do you solve these problems?

With a Fixed Index Annuity last year’s ending point is this year’s starting point.  An index linked annuity credits interest based on the upward movement of an index (such as the S&P 500) while protecting principal and previous earnings from market downturns.  Imagine if every year the market (S&P 500) went down, you could demand your money back, and then buy more at the lower price?  With an FIA, in a year when the market moves down, you retain your principal and previous earnings (or as I said previously “demand your money back”), and now you are linked to this year’s new lower index value (it’s as if you bought more at the lower price) and you are positioned to earn interest on any upward movement from this new lower index value.  This is the power of an FIA.  It’s heads you win, tails you don’t lose.  And all this happens on auto-pilot, every year, without having to liquidate funds to capture your gains.

Well, that’s the beauty of Protected Growth planning using fixed index linked annuities, or FIA’s.  Last year’s ending point is this year’s starting point.  An index linked annuity credits interest based on the upward movement of an index (such as the S&P 500) while protecting principal and previous earnings from market downturns.  So, in a year when the market moves down, you retain your principal and previous earnings (or as I said earlier “demand your money back”), and now you are linked to this year’s new lower index value (it’s as if you bought more at the lower price) and you are positioned to earn interest on any upward movement from this new lower index value.  And all this happens on auto-pilot, every year!  That’s why it’s a strategy that works in any market.  Now, having said that, I also must disclose to you that this strategy is subject to certain caps and limitations.  So, how well does it work?  Exceptionally well, according to a study conducted by the Wharton School of Business.  Here’s the (June 2009) quote from Forbes magazine:

 “Since 1995, these [equity-indexed] annuities have easily outpaced the S&P 500 and bond indexes alike.  ‘There is no asset category that outperformed them. We were extremely surprised, really just amazed,’ says David Babbel, professor emeritus of insurance and risk management, who conducted a study of equity-index annuity returns beginning in 1995…(and ending Jan 1, 2009)

Have a short memory. Buy/keep stocks because they “always” go up, buy houses because they “always” go up, and spend like mad because there are “always” plentiful jobs available.

However, there are some key problems with the ‘old’ normal. These problems were exposed in the last two years. But they are being swept under the proverbial rug of rising stock prices since March of this year. These problems include continued rising unemployment, too much household debt, unaffordable home prices, and an entire economy geared to consumption over production.

But that is all changing according to Bill Gross of PIMCO. PIMCO is THE company when it comes to bonds and bond mutual funds. And Bill Gross is perhaps the best bond mutual fund manager ever.

Mr. Gross says that we have entered a world of slower economic growth, a world defined by de-leveraging (paying off debts) and re-regulation. It’s a world he calls the ‘new’ normal. He wrote the following in a recent note to PIMCO clients:

“If you are a child of the bull market, it’s time to grow up and become a chastened adult; it’s time to recognize that things have changed and they will continue to change for the next – yes, the next 10 years and maybe even the next 20 years.”

What Mr. Gross says makes sense. Bear markets do NOT end quickly – the last bear market lingered for 14 years. And bear markets do not end with stocks still trading at well above their historical norms, currently at nearly 20 times earnings. And at 20 times still declining earnings, I might add. Bear markets also do not end when investor optimism is high. They end when investors are disillusioned and disappointed.

Mr Gross has suggested that investors would need to question many long-held beliefs as they adjust to this new normal. Among them is the idea that risky assets such as stocks are always better for the long run. In the subdued economic climate ahead, risk-taking is simply not going to be as rewarding…

 “The world is traveling on a bumpy road to a new normal”…  Mohamed El-Erian (PIMCO CEO).

 What about you?  Are you ready to navigate the new normal?  Are you ready to define ROI as Reliability of Income in the new normal?  Are you prepared for 27 years of income, beyond age 65?  (For a 65yr old couple there is a 40% probability that at least one spouse you will live to age 92)  Are your savings and assets positioned so that you will never lose money and never run out of money in retirement?  Are your savings and assets protected from inflation risk, so that you will maintain a desirable standard of living as long as you live?  Or, do you need help to create reliable, predictable income to guarantee you never run out of money in retirement?

 Protected Growth planning takes the complexity and guesswork out of retirement and income planning.

Is this giving you a head ache? Worrying and wondering about your finances and retirement savings can do that. I have the solution. My Protected Growth planning will show you how you can be automatically linked to the upward movement of the market, and unlinked when the market moves down, so you are always protecting your profits. My Protected Growth planning will capture gains on auto-pilot, without funds needing to be sold to capture the gain. I can show you how to lock in a gain, and still remain in the market to benefit from next years potential gains, while your principal and prior earnings are protected from market downturns. Guaranteed!

With Protected Growth accounts you get:
• Market linked growth without risk to your principal.
• A guarantee that you will never lose any money due to market downturns.
• Reliable, predictable income so you never run out of money in retirement.
• Built-in protection to battle inflation.
• Minimum annual growth of 7-8% for future lifetime income payments that can increase but never decrease.
• The opportunity to lock-in a first year return of 13-20%, guaranteed!

I know this sounds good, too good, right? So what’s the catch? Well, the only catch is that you need to call me at 317-852-9153 to schedule an appointment to see this solution. When you come in, I will show you how my Protected Growth planning will make your retirement years better and more secure. There is no cost or obligation for you to see if Protected Growth planning makes sense and feels right to you.