Annuities: Protecting Yourself Against Uncertain Markets

When it comes to growing and preserving wealth, it’s important to bear in the mind the volatility of the markets and how it could impact your retirement income. Fortunately, there are ways to help shield your savings from market woes. Designed to protect, grow, and provide a guaranteed stream of income is an annuity. Align yourself with less risky investment vehicles such as these that can offer upside potential and protection against the downswings. Here are some additional potential advantages to mull over:

• It creates an income floor that you can’t outlive, regardless of how long you live or how the markets perform.
• It can help cover essential expenses that Social Security and any pension payments may not.
• It grows tax-free up until your retirement.
• It can generally yield higher returns than other low risk investments, such as CDs, money market accounts, or bonds.
• It can offer more risk-taking for potentially better returns.
• It can provide a death benefit to have your income payments or account value be passed onto your beneficiaries.

Should I Withdraw from My 401(k) During a Pandemic?

Over the past several months, the pandemic has led many Americans to financial hardships. Individuals are fearful of how they’ll meet their financial obligations. The stimulus package may help alleviate some of the concerns, but what about those who still won’t make ends meet? When those funds have been exhausted, what options are next? As expressed in our previous communication, withdrawing from your 401(k) savings may sound tempting, but there are other alternative options. Analyze this from a case-by-case perspective:

• Reduce monthly expenses. Do you have monthly subscriptions that can be temporarily suspended or discontinued entirely to cut monthly costs? Examples include Netflix, Hulu, YouTube TV, etc. Consider keeping only one subscription that works for the entire family.
• Student loans. The stimulus package offers a six-month payment break for individuals with federal loans.1 This means individuals are automatically enrolled into this program by default. Payments will not be due within the next six months from March 2020 through September 2020. Interest will not be incurred; therefore, the outstanding amount on the loan won’t increase during this period. Borrowers are allowed to opt out of this program by calling their servicing provider.
• Utilize emergency funds. Resort to emergency funds first. In theory, this is why emergency funds were set up to begin with–a means of easy access during unprecedented times.
• Selling some stocks for immediate cash. The question of whether or not selling stocks during a crisis is smart has become a common question amongst investors. It’s important to not panic-sell. Instead, allow us to offer you a no-cost, no obligation consultation to present you with options that’ll best suit your situation.
• Refinancing student loan debt, mortgage payments, or car payments. If your student loan lender didn’t fall under the stimulus package, consider refinancing or going into forbearance. Although prolonging the life of the loan long term isn’t something we’d want to do, it can offer short term relief. This also applies to mortgage and car payments.

You work hard for your 401(k) savings plan. They’re not something that has been saved overnight but has taken many years of contribution. The value of your account could be worth much more years from now if left untouched.

Get Mortgage Relief from the Financial Impacts of COVID-19

As the number of COVID-19 cases in the U.S. continue to rise, Americans are seeing their hours cut, jobs disappearing, and expenses adding up. While the situation remains grim and many are waiting to return to work, homeowners are struggling to keep up with their payments. On March 18, 2020, the Department of Housing and Urban Development announced the suspension of all foreclosures and evictions for two months.1 Many mortgage lenders are also offering relief in response to this crisis.

If COVID-19 has caused you to be financially strained and you’re worried about falling behind on payments, contact your mortgage servicer as soon as possible for relief options.

The biggest chunk of the average American’s budget goes to housing. Avoid dipping into your savings–a mortgage forbearance could allow homeowners to allocate the funds normally reserved for mortgage towards other necessities.

Got questions or need a second opinion on your options? Don’t hesitate to pick up phone and call us at [INSERT PHONE NUMBER]. Don’t let the upheaval caused by COVID-19 throw your financial strategy off-course. Let us assess your needs and recreate an action plan to help you get through this unprecedented time.