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Guide To Financial Planning: Guaranteed Retirement

Capture the interest rate that you need to be able to get a jump start on your financial planning.

There is a certain mirage that you have probably adopted over time that is probably hurting your retirement account. By using investment calculators to predict how much annual retirement income you can get from your retirement nest egg you are creating an issue with your retirement savings – you think that their will be enough. These calculators ask for the rate of interest that you think you will earn on your savings during your retirement. This is where the “cheating” begins: don’t like the result that the calculator comes up with? Poof! You change the interest rate. And the results? Magnificent! You magically get the monthly retirement income that you want to see. The problem is that the interest rate you entered will most probably require investing in higher risk investments, which you obviously don’t want to use during your retirement years or even if you’re close to retirement. So, sadly, your result is really a mirage, and possibly a dangerous one at that.

There is an opportunity to increase your retirement and live in reality at the same time.

A Bonus Rate Annuity automatically credits the money you place into an annuity with a bonus rate of interest. For example, if you place $150,000 into a Bonus Rate Annuity, the annuity provider will credit your contribution with an 8% or 10% bonus immediately. An 8% credit would mean an additional amount of $12,000 placed into your retirement savings. A 10% credit would mean an additional $15,000 credited to your retirement savings. All of this is FREE money!

So, how does this actually relate to your desired monthly retirement income?  Here are a few examples… 

You place $200,000 into one investment which is taxed while it is growing, and $200,000 into a Bonus Rate Annuity, which is not taxable while it is growing. Let’s see what happens:

Assuming that you are in a 15% tax bracket and your investment grows by 5% each year for twenty years, your taxable investment of $200,000 becomes worth $459,781. This will provide you with annual retirement income of $36,875 for twenty years. Under the same scenario, however, the $200,000 you placed into a tax-deferred Bonus Rate Annuity crediting an 8% bonus rate would grow to $573,112 and the annual retirement income for twenty years would be $45,900, a gain of $9,025 each year and $180,500 over twenty years!business-163461_1280

Now let’s compare apples to apples and make both investments not taxable while they are growing:

You place $200,000 into an investment earning 5% each year for twenty years. It grows to $530,660 and provides annual retirement income of $42,500 for another twenty years. On the other hand, you place $200,000 into a Bonus Rate Annuity offering an 8% bonus rate. $16,000 is immediately credited to your retirement savings. You earn the same 5% each year for the next twenty years and the investment grows to $573,112. Due to the bonus credited to your annuity, you are able to draw out $45,900 each year for twenty years, an increase of $3,400 per year and $68,000 over twenty years! Taxable or not taxable, the Bonus Rate Annuity provides you with a better retirement.

If you are looking for a guaranteed way to retire and want to retire faster there is only one suggestion: 
Forget The Mirage. Go For The Real Thing. 

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