Safe Money Solutions
The most catastrophic mistakes retirees and even other advisors make today is not employing a strategy that minimizes or eliminates losses due to market fluctuations and other risk factors. Often, as we age, the damage done by losing money on your retirement assets is compounded in retirement due to a shortening time horizon.
Consider this: If you invested $100,000 into a mutual fund that experienced a 20% loss, you would lose $20,000. The account value on your next statement would be $80,000.
Question: For you to get your statement balance back to $100,000 what percentage gain would get you there? Most might assume 20%. Let's crunch the numbers.
Answer: No, a 20% loss followed by a 20% gain does not get you back to $100,000. In fact, to regain your entire loss in this example, you will need to get a 25% return. The lesson learned here is that you must always have a higher percentage gain to make up for a loss -- and that's never easy.
What's more, losses are often further exaggerated when withdrawals (such as for income or emergencies) must be taken from these accounts as their value is dropping, making it even more difficult to ever fully recover from a significant loss in retirement.
Like a life preserver for your retirement accounts, our safe money solutions can help minimize or even eliminate market losses from your accounts while still providing the potential for upside growth using market-linked earnings. For many, it truly is the best of both worlds -- some of the gains without the losses. Contact us today to learn more about the eye-opening options that you may have never knew existed.