Take the Madness Out of Your Retirement Planning

March Madness is here again. Do you have the winning bracket? The truth is it’s virtually impossible to fill out a perfect one. According to a Duke University professor, the odds of picking all 32 games correctly are 1 in 2.4 trillion.1 Even predicting the Final Four can be difficult: In last year’s Capital One Bracket Challenge, only 54 entries had the Final Four teams correct.2
 
The NCAA Tournament expanded from 32 teams to 64 in 1985. Ever since, it’s been wildly unpredictable. In fact, the very next year after expansion (1986) was one of the wildest on record. Six teams seeded seventh or higher (meaning worse), including a No. 14 seed, made it to the Sweet 16.3
 
The 2018 tournament was also one of the most unpredictable on record. It featured the first-ever win by a 16 seed over a 1 seed, along with six teams seeded seventh or higher making it to the Sweet 16. An 11 seed, Loyola Chicago, made it all the way to the Final Four.3
 
The NCAA Tournament’s unpredictability is one of the reasons the event is so entertaining. You never know when an underdog will knock off a college basketball powerhouse.

Unpredictability isn’t always a good thing, though. It’s certainly not helpful when it comes to your retirement planning. A successful retirement strategy is based on certainty, so you can make informed choices about your investments and your spending.

Fortunately, there are tools you can use to inject more predictability into your retirement. One is an annuity. Below are a few ways an annuity can help you take back control of your retirement strategy and eliminate unpredictability:

Downside Protection 

The 2018 NCAA Tournament was wild, but maybe not as wild as the performance of the financial markets last year. The S&P 500 finished the year down nearly 7 percent, largely because of an epic fourth-quarter meltdown. In fact, 2018 was the first year on record in which the index finished negative after being positive through the first three quarters.4
 
Some deferred annuities allow you to achieve growth without exposing yourself to the volatility of the market. For example, a fixed deferred annuity pays a set interest rate over a defined period of time. Your principal is guaranteed*, and you have no exposure to market risk.
 
You could also opt for a fixed indexed annuity. In this type of policy, your interest rate is tied to the performance of a market index, like the S&P 500. The better the index performs, the higher your potential interest rate, up to a maximum. If the index performs poorly, you may receive little or no interest.

Even if the market declines, however, as it did in 2018, you still won’t lose money. Your principal is guaranteed*, and your contract will never decline because of market performance. A fixed indexed annuity could help you take advantage of market potential without the risk exposure.

Guaranteed* Income 
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As you approach retirement, you may become more averse to risk and more sensitive to market downturns. After all, you’ve worked hard to accumulate retirement assets, and you’ll need those funds to generate income in retirement. The last thing you want to see is your savings decline in the final years of your career.
 
You may not be able to prevent a market downturn, but you can use an annuity to protect your future retirement income. Many fixed indexed annuities offer optional riders known as guaranteed* withdrawal benefits.

Under a guaranteed* withdrawal benefit, or guaranteed* minimum income benefit, you’re allowed to withdraw up to a certain percentage of your contract value each year. As long as your withdrawal stays within the stated amount, it’s guaranteed* for life, no matter how your annuity performs or how long you live. You can generate predictable, reliable income regardless of market performance.
 
Ready to take the unpredictability out of your retirement strategy? Let’s talk about it. Contact us today at First Fidelity Group. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.
 
1https://ftw.usatoday.com/2015/03/duke-math-professor-says-odds-of-a-perfect-bracket-are-one-in-2-4-trillion
2https://www.ncaa.com/news/basketball-men/bracketiq/2018-03-26/54-ncaa-brackets-correctly-predicted-final-four
3https://www.ncaa.com/news/basketball-men/bracketiq/2018-03-19/incredibly-2018-sweet-16-not-most-unpredictable-ncaa
4https://www.cnbc.com/2018/12/31/the-sp-500-will-make-history-when-it-ends-the-year-with-a-loss.html
 
 
*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values.
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18570 - 2019/2/22