Not Good!

Today there was a very interesting article on MSNBC having to do with the US debt hitting the limit and now affecting civil service federal employees pensions.

Treasury Secretary Timothy Geithner told Congress he would start tapping into federal pension funds on Monday to free up borrowing capacity as the nation hits the $14.294 trillion legal limit on its debt.

The debt limit is the amount of money the government can borrow to help finance its operations. The nation has reached its debt limit because the federal government has grown accustomed to borrowing massive amounts of money. The latest estimate shows we borrow 40 cents for every dollar it spends.

Everyone knew that the effects of the ridiculous spending of the government would come to a breaking point some time but who knew they would go as far as to dip into Federal Employees pensions.  

It may be time to move those qualified funds from the public sector to the private sector.

Federal Employee Benefits have always been looked at as a great reason to work for the government but now things may be taking a turn.

Where to look and where to go??

If you are a Federal Employee and want to look into your options, you need to get together with a trusted financial planner who is education in your benefits.

 Now is a good time to look into other vehicles to be sure you have  access to what you have earned when the time comes that you need the funds.

Why You May Not Have a Index Annuity-

There will be times in life when you will need to make this decision and be the driver. For example  adding fixed index annuities to your portfolio because your financial planner/advisor and investment firm may never recommend this,  and the media and publications won’t either.

Why?  Because they will no longer control the money, and thus they will not be able to draw a continuing revenue stream off of this money.  

The media and publications share in this revenue through advertising, and investment type firms are the largest advertisers by far. You see, fixed index annuities are only issued by insurance companies, and only through advisors who are licensed in insurance. 

Your current financial planner/advisor and investment firm will say anything to maintain control of this money and the revenue stream from it.  This is when you start asking questions and need to have a base of knowlege to protect your best interests as a consumer. 

Now you understand why you haven’t heard of index annuities, and if you have, why you may had been told they are not good for you.  What are fixed index annuities?  Why will they benefit you and how do they protect your wealth?  Why should they be in your portfolio?  Why should they be in everyone’s portfolio?

 The key to why index annuities perform so well is simple: THEY NEVER SHOW A LOSS.  Richard Russell, founder and editor of The Dow Theory Letter, put it succinctly when he said, “He who loses least…wins!”   With index annuities we never lose. Index annuities without caps are excellent vehicles for your financial security. 

 Enjoy the gain and eliminate the pain. 

In the end being a consumer of finanical advice you need to take responsibility to know your options or at lease ask the questions from time to time.

Index annuities allow you to earn interest annually based on a portion of the upside movement in an equity stock market index such as the S&P 500,  which is the most often used (other indexes are available even within the same annuity) with NO DOWNSIDE RISK and COMPLETE SAFETY.

Here They Come!

All the big banks you have heard of like Bank of America, JP Morgan, Chase, and Wells Fargo are adding staff, creating easier-to-use technology, and competing on fees in an effort to win a bigger share of the trillions of dollars in 401(k) savings plans. JPMorgan almost doubled its sales force dedicated to selling retirement plan services to employers in 2010. This has become a top priority of JP Morgan.

Americans held $2.9 trillion in 401(k) plans as of September, and the total may reach $4 trillion by 2015, according to Cerulli Associates, a Boston research firm. Increased competition from banks may lead to lower costs and more choices for employers and savers, says Laura Pavlenko Lutton, an editorial director in the mutual fund research group at Morningstar.

Banks are scrambling for new ways to make money after losses on mortgages and increased regulations have curbed their revenue sources.

As all of these banks are upping the ante on the retirement market. What does this mean for you and your retirement? As a consumer you need to look at the bigger picture. In the last decade many uncertainties have come into play.

These big banks know everyone is scared and unsure of the future at this point. No one wants the fear of not being able to retire or the fear of running out of money at an old age. You do have many options to choose from when you are ready to get your retirement started, but not all will be a fit for you.

Due to the market volatility and the low interest rates at the bank, you have a few options to rule out right off the bat. When looking at fixed annuities the options are endless as well. But you have two added benefits, your principal is always safe and the rates are higher than the bank. Now you have found which vehicle to look at, you get to decide what options you need. this will depend on your current situation along with what you would like your future situation to be.

What is going on with Pensions?

In the past, when the stock market crashed, private industry’s employees 401(k)s lost value.  At the same time government employees and retirees did not suffer. Hundreds of billions of dollars in stock market losses had to be made up for by tax-payers. Government employees and retirees got every penny promised to them. That might be changing. 

In recent years, people in cities and states across America have learned that the pensions promised to government employees are threatening the financial health of their economies. Right now,  thousands of government workers in Wisconsin, Indiana, Ohio and other states are protesting planned cut-backs and downward adjustments to their pensions.

Many government employees who thought they had a totally safe retirement program are now learning otherwise. Retirement plan contributions are being scaled back, cost of living increases are being significantly reduced and there is a growing nationwide movement to reduce the pensions promised to current employees.

The only alternative to reducing government pensions is to lay off even more government workers.Virtually every pension expert in the country and an increasing number of government worker union officials say that further reductions in government pensions are inevitable.

Yet few financial advisors have recognized this mega-trend and even fewer are providing education to their clients who may see significant reductions in their government pensions.

The Increasing Popularity of Annuities: Hundreds of thousands of government employees, including school teachers, college instructors and employees of non-profit hospitals are already receiving government sponsored annuities through their 403(b) programs.

They have come to love these 403(b) annuities and the protections they offer. We have found that as they plan for a safe, secure retirement, these government employees quickly grasp the benefits of adding a hybrid income annuity to their retirement portfolio.

With the rapidly spreading nationwide crisis in government pension plans, we believe that millions of government employees, not just school teachers, college professors and government doctors and nurses, will be turning their attention to annuities.

Why should all of us who don’t work for the government sit back and watch?… Use this as a great example of what your next step may be to help you save in a secure vehicle.