Page 74 - Ready Set Retire

Stephen J. Kelley

money shifted to in an interest rate environment primed to
blow up?

TDFs are not just flawed products; they are the product of a
flawed system that sticks with the claim that the only way to
grow your money is in market-based assets, and the only way
to reduce risk is to reduce potential return.

Rather than sticking with a model that requires a lower return
for increased safety, perhaps there is another way. While I
accept that you must have a risk class to grow your money, I
reject the notion that market risk is the only risk class
appropriate for the job. Market risk is just that. It boils down
to what someone else will pay for what you own, and that is
often a function of wild euphoria or deep depression in the
market. How is that a good place for your future security?

That’s why annuities have proven to be such powerful income
tools. They maximize payouts over time while eliminating
market risk by employing different risk classes: time and
mortality. Time and mortality are predictable on a massive
scale, while not so much on an individual scale, and this creates
powerful leverage that can generate great wealth.

If you are planning just for yourself, you must figure on having
enough money for 30 to 40 years of retirement. However, an
insurance company only must plan to life expectancy usually

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