Operation TRIPLE Starfish – LTC, FIAs and GOLD?

OK, my last post let you know that the opportunity for women to buy long-term care insurance without being charged a lot more ends June 30th.  I didn’t expect to be writing again so soon. Many changes are happening in our economy that I may be able to help you with that have made me create OPERATION TRIPLE STARFISH! So here’s the scoop:

Today’s turbulent economy is forcing Americans who value their independence over anything else to find new ways to remain financially secure into old age. Long-term care insurance can play a huge role in that picture, but there are two other things you can do of which you may not be aware…Fixed Index Annuities to preserve your principal with no fee and GOLD to inflation-proof your savings. Why are both of these strategies in the limelight now?

gold bars-small

protect money

Yes, the U.K. just left the European Union but that is just the icing on the cake. Many smart people have long been predicting a major market downturn that could be greater than 2008 and 2001.  When I see people in their 60s with most of their money in the stock market, it concerns me and I ask them if they have heard about this potential downturn.  One woman said yes and when I asked her where she heard it, she said her brother knows someone on the board of the Federal Reserve. No kidding.

If you have looked at some of my other blogs, you will see one dated July 26 that explains how I discovered the world of Fixed Income Annuities (FIAs) as I searched for ways to help people who could not qualify for long-term care insurance due to poor health. That article explains how to use a Fixed Index Annuity to create a guaranteed lifetime income that pays double for up to 5 years if you need long-term care then goes back to the regular lifetime income for the rest of your life. There is an annual fee of 1% to make that happen.

Then I learned that most people don’t use FIAs to pay for long-term care; rather, they use them to keep their money safe, and there’s no fee to do that. How do they work? It’s a type of deferred annuity that’s been around since about 1997 that protects policyholders from downturns in the market, yet allows them to profit from upturns. In other words, if the market falls, you don’t earn anything but you don’t lose anything either. If the market does well, you get some of the growth but not all of it. The people who don’t like FIAs don’t like that you can’t keep all of the upside, but from where I sit, just removing the losses is the most important thing. Here’s a strong example as cited in my friend Patrick Kelly’s book Stress-Free Retirement:

The worst-performing stock index in the world is Japan’s Nikkei 225 Index.  From the year it peaked in 1989 – 2011, it had a 79% negative return. In other words, $1000 in 1989 would be worth $217.13 in 2011.  Now, here’s my point.  Just by substituting a zero for all the years that had a loss, the 79% loss goes to a 284% gain.  So the $1000 would be worth $3,838.09 in 2011. But to really make the point, let’s remove the losses but cap the gains:

  • capping the gains to 7% results in $1,663.34 in 2011
  • capping the gains to 3.5% results in $1,318.91 in 2011
  • having no gain and still having the $1,000 sure beats winding up with $217.13, don’t you think?

So the point is that it’s really not so much about what you make in any given year as it is about making sure you never lose. (FYI, this index had significant gains 2012-2015, which would make the $1,000 worth a whopping $353.31 today instead of $217.31. BUT, substituting a zero for all the loss years and capping the gains at 3.5% means that $1,000 would now be worth $1566.45!)  I think you get the picture, but to make this more real to you, here’s what it means today, using the most conservative projection in each case:

  • $100,000 for a 58 year old female could grow to $176,254 in 12 years
  • $200,000 for a 52 year old couple could grow to $350,000 in 12 years
  • $400,000 for a 66 year old female could grow to $705,000 in 12 years
  • $375,000 for a 75 year old male could grow to $632,000 in 12 years

Let me put it to you another way.  If you could go to Vegas and know that you could keep all your winnings without having a losing hand, how many of you would be on the next plane?

So why am I writing about this now? Because with all the economic turmoil going on, the companies that offer this wonderful product are changing the terms in a few days so to get the most favorable growth, you need to book a time with us to learn more about it. Applying for a Fixed Index Annuity is like applying for LTC insurance, except easier since there are no health questions.  If you get your application in by the deadline, you reserve your spot to do it.  You can still change your mind and not do it, but if you don’t get your application in, you won’t have the choice. So click on the Starfish to reserve a time with us in the next week and get Patrick Kelly’s Stress-Free Retirement book FREE.  Choose Telephone 3 to discuss FIA options.

Reserve a time - FIA

Reserve a time – FIA

“Stress-Free Retirement” book free with appointment

Oh wait, I said this is a TRIPLE Starfish post, right? I think all I have to do to explain this one is to point you to this article that just came out: “Why Gold May Hit $1,500 by Year’s End – and It’s Not Just About Brexit”.

And that’s all I have to say about that. Gold is such a special topic that it deserves its own blog…so stay tuned!

If by this time you are thoroughly confused about why I keep bringing up a starfish, see last week’s post for the story about why the little boy kept saving one starfish at a time.

Are you that one?


    • Barbara Walsh on August 14, 2019 at 11:03 am
    • Reply

    So what advice would you give those of us who have just received letters from our Genworth Long Term Care agents raising our premiums by 80%; Genworth being downgraded; Genworth losing their BBB rating, complaints flooding the internet from customers in the same boat – huge increases in premium and threats of more to come.
    Do we keep paying these huge premiums because at our age (72) no other company will take us? At what point does it make sense to save the money and invest it? I like so many others was told by my agent that Genworth never raises their premiums and that the likelihood of them doing it in the future was very unlikely. I feel so naive believing this, and believing that purchasing this insurance through a church (Thrivent Financial for Lutherans) meant I was protected? They are clearly in financial trouble, where was the insurance commission in all of this?

    1. Your frustration is very well justified Barbara. Your agent should have never told you the premium couldn’t increase. LTC insurance policies are guaranteed renewable, which means they can go up based on class such a geographical area or on everyone who bought a particular policy series, but not on you personally. 72 is not too old to change plans. If you would like to discuss options with me, please reserve a time on my calendar at this link.

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