Page 47 - Know-So Money, Hope-So Money, Retirement Secrets Wall Street Doesn't Want You to Know

entire original premium in 10 years (or a little longer, depending on
your return, and whether the 10% is calculated on the original premium
every year or the new account value). Do you have a plan in place to
spend your entire principal in ten years?

So, with a fixed annuity you know up front what the worst case scenario
will be. And because you know the facts without a doubt, you can do
actual planning. Know-So Money!

2. “I don’t get all the upside – caps and participation rates
are limiting.”

It’s true that you don’t get all the upside with an FIA. However, it is not
a disadvantage to get some of the up and none of the down compared to
what most people get. Actually, with your diversified portfolio, not only
are you not getting all the up, but you are participating in all of the

down. Personally, I would rather get some of the up and none of the
down than to get some of the up and all of the down. (Some of my
clients got over 10% in the last couple of years—with no risk. How did
you do?)

3. “I don’t like surrender charges.”

Surrender charges are voluntary and self-imposed if more than a 10%
penalty-free withdrawal is made in a given year. Let’s say you had a
charge as high as 12% (worst case) for an amount taken above the 10%

penalty-free withdrawal. Let’s use the example of a $20,000 withdrawal
from a $100,000 account. The first $10,000 is penalty free. The second
10,000 withdrawal would incur a 12% charge ($1,200). $1,200 is 1.2%
of your $100,000 account. Let’s also assume that you made 8% on your

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