• Avoiding Negative Years

  • Financial Mistake: Participating in financial market downturns or in-vestment losses when approaching or during retirement, particularly while drawing an income from such assets!

    Avoiding Negative Years

    If your investments lose 57% in value, how much gain is needed to get back to even?

    The answer is 132% (without taking any withdrawals prior to getting back to even)! This is an inverse rela-tionship of gain to loss*.

    This type of example is similar to what happened with two major U.S. stock market indexes in 17 short months between October 2007 and March 2009. It took about another 4 years for the indexes to recover. This brings us to some other points:

    #1-Recovery from market losses may take a considerable amount of time. This should be considered before taking market risks.

    #2-Taking an income during a market downturn can compound the difficulty of getting back to even. This can increase your chance of running out of money (see Not Outliving Your Money).

    Example: The charts below depicts how the impact of the timing of gains and losses can affect values when drawing a retirement income.

  • One way to avoid investment risk is to avoid investments. No comparisons can be drawn between investments and fixed products. However, products earning fixed interest are a viable alternative to risking your retirement money. One such financial product offering fixed interest is a fixed indexed annuity.

    Some fixed indexed annuities incorporate Annual Reset strategies, which allow you to:

    1. Earn interest linked to external market indexes when the index experiences positive movement.

    2. Avoid any loss due to negative index movement.

    3. Start over each contract year at the current market index value (this can be particularly advantageous following a negative year).

    Annual Reset strategies available in many fixed indexed annuities can keep you from having to make up lost ground during retirement. (See Basics of Fixed Indexed Annuities) 



    What if you could earn interest linked to an index on positive years

    but automatically avoid negative years? 

    Click here for a complimentary no obligation financial review with a Future Benefits Agent

    Or call us at 901-754-2040

    *We are not stock brokers or financial advisors and do not give investment advice.

    See our Professional Disclaimer