Page 164 - Ready Set Retire

Stephen J. Kelley

But wait...what about the caps? What if the market goes up
30% and I have a cap of 7%? Well, that can happen. But that’s
where a good advisor that understands these policies comes
into play, because there are many “crediting strategies”
available. Some use caps, some use participation rates (ex. 50%
of the upside), some use spreads (100% of everything after the
first 5%). There are annual point to point, monthly average,
monthly point to point, etc. However, the bottom line is you
got into this to get away from the risk, right? And what goes
with potential upside of 30%? Right! 30%, or even more,
downside!
The thing to remember is that you have lots of options to
maximize your gain, and we can help you with that. But, unlike
in a securities investment, you have NO RISK of losing any
money. So, if we guess wrong, you might make 12% interest
one year instead of 15%. But if your broker guesses wrong, you
could LOSE 30% of your holdings!

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