I have been spending a lot of time lately working on my retirement finances. After working with fixed annuity agents for over a decade, I have noticed that sometimes we help other people more than we help ourselves. This is a huge mistake because we should lead by example.
Around age 48, I started practicing what I preached with the purchase of annuities with income riders (seven annuities and counting). At age 53, I am looking at second-to-die life with long-term care riders and making some decisions about cash-value-building life insurance as well as some other things to create long-term tax-advantaged cash flow.
When I am looking for inspiration and on the concept of income floor planning, one of the people I like listening to is Tom Hegna. Tom was a keynote speaker at the Round-Table Radio Marketing Conference. I spend nearly every working day of my life designing annuity-based income plans for the agents I support and sometimes forget about the importance of life insurance, but Tom was able to get me motivated to add more life insurance to my portfolio.
For risk-based investing, one of the investors I listen to is Rick Rule, who specializes in precious metals and fixed assets. Rick, unlike many precious metal investors, does not turn his commodities investing into a religion. He approaches investing from a pragmatic, Warren Buffett-style philosophy: Only invest in what you understand. Turning investing into a religion is very dangerous, because it can blind you to the various angles of risk.
What I also like about Rick is that he constantly talks about being capitalized and having "dry powder." In other words, money that sits around and does nothing until there is a market crash, so you can take advantage of below-intrinsic-value prices on equities and assets.
So what does any of this have to do with annuity sales? More than most people realize.
Dry powder can only be used with certainty when you have an income floor. An income floor allows you to have the confidence to allocate capital into risk when everybody is running from the fire.
Think about this with respect to your personal finances. What if you had all the residual lifetime income you would need guaranteed for the rest of your life and then had a bunch of cash sitting on the side? How would that make you feel?
