Is there a safe place for retirement money?

Staff writer

Warren Buffett once said, “If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes.”

Unlike the stock market, with its ups and downs, there is a way to invest hard-earned savings in an investment plan that guarantees the safety and security of that money.

Warren Priel of Financial Details and More, Hillsboro, is an insurance agent who sells such a plan. He said the plan replaces the need for diversification and has a return that competes favorably with the stock market. It secures a good standard of living in retirement with no danger of losing the principal or the credited interest it generates.

There are no taxes on the income produced by the investment until a withdrawal is made, and there are no consultation fees or commissions taken out of the money invested.

“It’s possible to make as much or more in retirement as you did working full-time,” Priel said.

Technically called a fixed equity-indexed annuity, the plan is an investment in bonds through an insurance company that backs it with ownership of a pool of bonds.

“That’s why we can guarantee that an investor’s money will never be lost,” Priel said. “The insurance company buys and sells bonds every day, and if one bond goes bad, it doesn’t affect the pool.”

Priel works with a variety of large insurance companies to provide the plan best suited for each of his clients. These companies are highly regulated by the state.

Investment amounts vary from $10,000 to as much as $1 million.

Returns are guaranteed each year, and up to 10 percent of the money can be withdrawn each year with no charge. Taxes on returns are not charged until withdrawal.

The “indexed” part of the policy reflects the fact that the investment is tied to a stock market index such as the Dow Jones or S&P. When the market goes up, the return goes up, but when the market moves down, the investor loses nothing.

The account value may be passed directly to beneficiaries upon death.

Priel said most people he has dealt with recently are nearing retirement and are interested in a hybrid annuity that provides a “guaranteed lifetime income.” It guarantees a payout for life even if the investor outlives the funds in the account.

Tom Kimbrel, the Edward Jones agent in Marion, said his company does not sell fixed equity-indexed annuities.

“I haven’t studied them and I don’t recommend them,” he said.

He said those annuities set a cap on market gains that an investor can earn, and they often require a long period of years before any of the money can be withdrawn.

For more information, call Priel at (866) 947-5556, or go to www.annuity.com.

 

Quantcast