• Mark Dierolf

Are you playing roulette with your retirement?

Updated: 3 days ago

Savers often don't understand the risks they take. A chance to earn more than a bank CD or fixed-rate annuity is tempting, but a higher the payout means are higher the risk of losing your money, even if your broker is a banker or works for the retirement plan of your employer.

Investments that earn more than a bank CD and are not an annuity, are likely what's called a "security." The term "security" refers to the ownership in the investment, not its value. Statements for securities are often sent quarterly, but that is not enough time because value can be lost at any time.

You pay a penalty when the security drops in value. The penalty is the value lost when it's sold before its gains return; the time lost waiting; or both.

Your investment, and more, may be at risk when trading securities. The only sure thing when investing in a security are the fees that you pay.

Broker/dealers may say keep playing when your investment is losing value, but a loss means lost time, and a your losses may never be repaid.

Don't bet more than you can afford to lose. There are better ways to grow your savings than risking loss from a market downturn. Bank CDs and fixed-rate annuities are low risk investments. No worries means you only need an annual statement.

Bank CD interest rates are often lower than the cost of living, but your savings are safe up to the insured amount. But banks offer securities that can lose money and have no insurance.

Fixed-rate annuities often pay better than a bank CD. They are used for retirement savings and may offer tax-deferral of earnings for any savings not needed until age 60. Annuities are offered by life insurance companies and are backed by the insurer's claims-paying ability. They may also be insured.

A fixed-rate index annuity is the way to go for savers who want an edge against inflation but are busy or don't have the skill to play on Wall Street.

Customers need to qualify for an annuity because an insurer can't accept savings unless the customer can afford to let it work during the term. Age matters because the benefit for heirs is often higher than the surrender value.

Customers love annuities when they know how they work. Call for a review of an existing annuity or to learn if one is right for you.

Call today: (831) 753-0507

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