Financial services professionals need humility and should admit they don’t have all the answers. Our belief is that interest rates could have made a multi-generational low in 2016, and may begin rising slowly over the next 10 or 15 years.
A doubling of rates from 2.7% to 5.50%, [ Update: As of 01/20/2020, the 10 Year Treasury Yield is 1.91%] instead of this being a good thing, could make the average mutual bond fund decline between -30% and -45%! An increase in interest rates could crush the “safe” portion of your portfolio at a time when you can afford to lose it the least.
If we’re wrong and the United States follows the path of Europe and Greece, and have negative interest rates, pension austerity programs could devastate retirees. I see my own Mom and Dad struggling to find a decent yield.
Either way, if the US Treasury 10 Year rates double from their current level (2.70%) or fall below zero, it could devastate the “safe” portion of a retirement portfolio. The 4% Rule of Retirement doesn’t work in a near-zero interest rate environment.
Widows and divorced women are the most vulnerable according to the Social Security Administration and US Census Bureau.
Please CLICK HERE and read our newsletter “An Asylum for Widows” to learn how Fixed Index Annuities and Immediate Annuities may be the answer to providing a stable, guaranteed lifelong income “paycheck” to supplement a bond portfolio and Social Security checks.
Insurance companies provide a solution to providing a safe, stable, and guaranteed* lifetime cash flow. There are a number of different Fixed Income Annuities with guaranteed income riders* in the marketplace. These products change periodically and the goal of this page is to make you aware that these products exist. If you have an interest in learning more about these products and the best available products in the marketplace, please contact our office at firstname.lastname@example.org or 847-686-4800.
*An income rider is like an “a la carte” option you can attach to an insurance contract, generally for an additional ongoing fee.
* Not insured by the Federal Government but guaranteed by the financial strength of the insurance carrier / policy provider