Issue Four

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It's Your Money!
Issue  4 - February 5, 2013
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401(k) vs. Cash Value Insurance vs. Fixed Index Annuities - You Decide

When you compare a 401(k) to cash value insurance and fixed index annuities, one is clearly inferior, but you be the judge.

The 401(k) grows or depletes uncapped based on the performance of the market, and the funds you choose to invest.  Your taxes are deferred which means the money you invested and the growth are taxed on the back end, after you’ve experienced the growth.  You can experience tremendous gains, but you can also lose all of your money.  While still employed, you typically can only access half of your money invested, and if you do access it before 59 ½, you’ll pay taxes based on your tax bracket and a 10% penalty on the money withdrawn.  And you pay fees over the life of your savings that are never disclosed.  http://www.dailyfinance.com/2012/06/05/hidden-401k-fees-retirement-plan-ripoff/

Cash value insurance either provides a guaranteed fixed return (4 – 6%) regardless of how the market performs or or it provides stock market indexed crediting sometimes as high as 7-8% based on market performance.  You can typically access 92% of your cash value accumulation, and there is a death benefit included that is paid to your heirs tax free.  Since none of your money is invested in the market, your investment is guaranteed and protected from market loss.  Each premium payment covers cost of insurance, administrative costs, etc.

Fixed index annuities provide triple compounding growth, tax deferred.  You earn interest on the money you invest.  You earn interest on the interest you earn, and you earn interest on the taxes you would have paid.  You can elect to earn a guaranteed income payment for the rest of your life that in some cases can increase annually just when your medical expenses begin to increase.  Insurance companies offer premium bonuses as high as 20% on money invested within the first three years and in unique cases, seven years.  Regarding access to money invested, you’re able to withdraw 10% annually without penalty.  If you decide to withdraw the entire amount, you can but would have to pay a declining surrender charge plus taxes.  None of your money is invested in the market so it is completely protected.

Just because everyone is choosing 401(k)/IRAs to invest for retirement doesn’t make them the right choice.  This is especially true for those that have left 401(k)/retirement money at a former employer.  The name of the game is to maximize your retirement income.

Call me for a free consultation.  It’s your money . . . until you give it away.

 

Business Shout Out!

The following businesses are now members of my Business Advisory Council.  All members have proven to be reputable, fair, and committed to delighting their customers.  Please join me in congratulating them!

Chef Carlos on the Square, AWESOME restaurant in Lancaster, TX, 972-218-8000

10 Minute Oil Change, HONEST car repair in Duncanville, TX, 972-572-7800

Buddy’s Sporting Goods, goto place for uniforms, sports equipment, etc, in Duncanville, TX, 972-780-8149

Dry Clean USA, the dry cleaners that keeps me so fresh and so clean, clean, Cedar Hill, TX, 972-291-9917

Did you know?

Dr. Thomas Stanley, author of The Millionaire Next Door, and probably the foremost expert on the study of the affluent, suggests the following formula to determine what your net worth should be at any age:

 

Net Worth = 10% X Age X Income

If you’re not there, I can show you how to get there.  Call me for a free consultation.

Who is Your MVE - Most Valuable Employee?

In every business there is someone or several that are the heart and soul of the enterprise.  Especially in a family-owned and operated business, these people embody the spirit of the business.  The brand, reputation, and character of the business reflect their personality.

Most of those that make their livelihood in the business, pay their bills via the business, or pay for college via the business, have  never thought about what would happen if this person unexpectedly passed away or was disabled.  It is too painful and too frightening to think about how everyone would survive.

These key individuals have unique talents and provide the business a competitive advantage, influential connections, and years of experience and would cause irreparable damage to the business if something unexpected happened.

You can protect the business against this loss using a key person insurance policy.  This policy would provide a tax-free cash infusion to help with recruiting a replacement or paying a salary during disability.  In addition, this insurance policy can be structured to accumulate cash value that can be used tax free to benefit the business along the way, even when no death occurs.

Call me today for a free consultation.  It’s your money . . . until you give it away.

Did I mention . . .

If you own commercial property, and you're upside down on the mortgage, a member of my Business Advisory Council can help you refinance and

have equity in your property again.

 

If you own a residential property that appraises for over $420,000, and you're upside down on your mortgage, you too could refinance and have equity in your property again.  Call or email me to find out how. 

Updates

·       Looking for a featured speaker for your group, association, organization, small business, etc? I regularly present "the 10 Principles of Money Mastery" to organizations just like yours. Call or email to make me your featured speaker!

What's coming?

Next issue, I plan to highlight individuals and businesses that can help you secure financing for the American dream - your own home.  Stay tuned!

Ray Hodges Ray Hodges

214-810-5881 (w)
214-675-2952 (m)
214-785-6173 (f)
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1204 Ashford Dr, Desoto, TX 75115, United States
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It's your money . . . until you give it away.

cimone key

dalas, texas