Broker Check

COMING SOON - NEW Bluffton Location

117 E Elm Street

Bluffton, OH 45817

MAY 2020 – Guaranteed Income

FAITH FOCUS - “It’s your money...shouldn’t it reflect your values?”

Dear Clients,

In 30+ years in the financial service industry, I have rarely seen things change as rapidly as they have in the past few months.

New vocabulary: COVID, social distancing, alone together, PPE, PPP, etc.

New priorities: hand sanitizing, making sure the internet works(!), toilet paper

New financial realities: significant unemployment, government stimulus across many sectors, unprecedented national debt

Change is not always fun and changes that make us feel out of control are even less fun. One of my roles as a financial adviser is to help people mitigate risk and protect themselves from negative life changes. Coming into the COVID pandemic, I could not have predicted the events of the past several months, but I could have given you some idea how to prepare:

  • It is paramount to have an emergency fund.
  • Reduce debt...especially unsecured consumer debt.
  • Invest according to your risk tolerance and personal timeline. Don’t accept a cookie-cutter approach to your finances.

 

SPEAKING OF CHANGE...Something has come to our attention that we thought should be shared with you. As you well know, COVID-19 has challenged our economy in unprecedented ways and we may not know the full affect till months or maybe years down the road. This is not to say we should be afraid at all, just wise in dealing with the circumstances.

Over the last few weeks, we have watched various investment companies adjust their products (lowering interest rates, lowering the income that can be produced, dropping products from their line-up, etc.) This isn’t a fearful thing – it is simply wise for companies to adjust to the market trends so that they can stay fiscally healthy. Insurance companies especially take long term viewpoints on their products... 20-50 years! For many folks approaching retirement, especially those with a conservative approach to risk and a desire for steady lifetime income, we often recommend using a product that is fairly unique – one that offers great lifetime income AND a full return-of-premium death benefit to your heirs or charity.

 

Consider... great lifetime income AND a full return-of-premium death benefit to your heirs or charity.

 

If you are approaching retirement, it might be beneficial for you to open one of these unique accounts now rather than wait. This would “lock-in” the benefits of the contract for you, even if the company decides to suspend the offering of this product moving forward or reduce the benefits to a lower level for new contracts. I have seen this happen recently and many times over the 33 years I have been in this industry. As a matter of fact, two of our staff have recently invested in this unique contract for that very reason. Again, I want to underscore that it is prudent for a company to adjust to long term financial events and these adjustments are one way the current contracts stay very secure.

  • How would I purchase such a contract?
  • How would I know if it is right for me?

See more details inside and know that we would be happy to talk with you over the phone or on a Zoom video call to discuss this with you. As always, Faith Investment Services believes in a no-pressure approach. We share this because we feel it could be a wise opportunity for some. Maybe you would benefit from a conversation!

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Have things changed for you — new home, new phone number or email, new child, family changes?  Do you need to change your beneficiaries? Please take a moment and email rzimmerman@cfdinvestments.com. We may simply need to update our files, but certain types of information should also be reported  to the companies who hold your investments. Let us help you stay up-to-date! If you don’t wish to receive this mailing, you can email the address above to opt out.  

A QUICK MINUTE…

Prediction for economy after COVID-19: Once we enter the post-COVID economy, working from home and entrepreneurship are likely to continue. Unfortunately, some laws make it harder for companies to provide benefits and training to independent contractors and freelancers. These laws could be changed to allow companies to give training and benefits, if they choose, to independent contractors and small businesses that are not directly in their employment. www.thehill.com

Prediction for normalcy after COVID-19: We’ll probably be avoiding large crowds for a while. In the first stage, people will go back to the factory or the office. Then I suspect there’ll be a lot of business for barbershops and beauty salons once they reopen, and for retail that doesn’t involve large numbers of people in a crowded space. Only when people feel safer–and the government relaxes guidance–will restaurants, movie theatres, concerts, and sporting events resume. www.brookings.edu

 

HOW GUARANTEED INCOME OUTSMARTS THE MARKET

It is important to know your tolerance for risk. Many of us who thought we were very aggressive and unafraid of risk really had those feelings tested in this latest downturn. Do you still like the rollercoaster as much as you used to?

At “ProtectedIncome.org” they talk about protecting your M.U.G. — which stands for mortgage, utilities, and groceries. The basics. It is possible to set up systematic income for life that helps secure your ability to provide the basics for you and your spouse, without giving up control of your money.

Guaranteed income is not for everyone at every stage of life. If, however, you are within 3-5 years of retirement and do not want to watch the effect the ups and downs of the stock market have on your potential retirement income, it might be worth a conversation to get an education. Knowledge truly is power!

https://www.protectedincome.org/annuities/mug-income-planning/

 

5 WAYS TO BEAT AN ECONOMIC DOWNTURN

1) Lower Your Costs: Whether you're running a business or a household, now is the time to cut costs and become a cash flow machine. Also, find lower-cost providers for services and goods and cut every form of waste and fat. When you use each resource to its maximum advantage, it's good for the environment and even better for your bottom line.

2) Bargain Shop: Many vendors are offering steep price concessions. It seems everyone is having a sale, but you have to ask for the discount. You'll be amazed by how much money you can save just by asking for a discount. Try it for a week.

3) Add To Your Portfolio: Build your portfolio when securities are “on sale” if you are inclined to be in the market for the long-term.

4) Refinance Debt: Interest rates are bouncing off historic lows. Locking down unrealistically low, long-term, fixed rate mortgages is an extraordinary opportunity in today's recessionary environment. This is one of my favorites. This strategy applies to investment real estate as well as your personal residence. Get a fully amortizing, long-term, fixed rate loan. No balloons, variables or other hybrid loans are advised.

5) Utilize Government Assistance when applicable: I personally dislike all the government bailout and incentive programs. It’s a shame that the government goes deeper into debt while paying consumers to purchase cars (Cash For Clunkers) or homes (First Time Home Buyers Tax Credit). However, like it or not, these opportunities exist and can be very helpful in certain situations. If you're in the market for a car or first home, it could be beneficial to take advantage of these government incentives.

 

 

RETIREMENT—A MULTI-PRONGED APPROACH

“I’m going to retire in two months, Gary. This is your chance to be a miracle worker!” HA!

Most of us know it doesn’t exactly work like that. When you want to retire, one of the biggest challenges you face is replacing your current income with ‘retirement income.’ Where does retirement income come from?

Most people have a multi-pronged approach. Their retirement income comes from:

  • Social Security or other government pensions
  • Possible private pensions (although these are diminishing)
  • Guaranteed income from annuities
  • Systematic drawdown of retirement savings (in IRAs, etc.)
  • Part-time work

  

The THREE PHASES of Retirement

We approach retirement from the day we start working. Some of us, unfortunately, start counting the days until retirement then as well (that’s a subject for another day!) While we are working, we are in the Accumulation Phase. This is the time that we are setting money aside for retirement, either by payroll withholding to our 401k or 403b or matching funds from our employer or annual contributions to a Roth or Traditional IRA. Then, about 3-5 years prior to our planned retirement, our focus changes. We are then in the In-Transition Phase.

This is often where people first reach out to us at Faith Investment Services. Let me assure you, we LOVE to meet with people who are accumulating because we believe we have great resources to offer you in that phase. But the reality is, many people wait until they are ‘planning to retire’ to talk to us. When you are “in-transition” you generally start to think differently about what you have accumulated. Maybe you realize you haven’t accumulated enough. Or maybe you don’t know how much income you can generate from your assets. You know that you can’t recover from a huge downturn at this point and you might begin to feel more cautious about investing. These are all normal feelings and we carefully guide folks through the “in-transition” phase.

Finally, you retire! (Woohoo!) This is when you potentially need to start to get income from your retirement savings and you are in the Distribution Phase. If you haven’t had a financial conversation with a professional before this point, it can end up being like our opening line: “This is your chance to be a miracle worker!” Getting help at this point leaves no room for adjustment or ‘tweaking’ your plans. You are done working and you’ll live on whatever you can live on—with fewer choices.

WHAT PART DO YOU CONTROL?

If your health is good and there are no big economic surprises, you might be able to control the timing of this entire process. For some folks, though, a ‘surprise’ medical condition or job loss pushes them into the distribution phase before they expect it.

What is the harm in having a conversation now? In the accumulation phase? In the in-transition phase? Our approach at Faith Investment Services is very lowkey. We only want to work with those who want to work with us—meaning those who will allow a relationship to form so we can be in a great position to help.

If you’d like to talk, there is no cost or obligation. We simply ask that you complete a basic questionnaire that allows us to get an overview of your situation. That questionnaire is your ticket to a conversation. If we can be a help to you, that’s great. If we simply build a connection that might help you in the future, that’s good too.

Contact Gary Reese (419) 358-4207 or gary.reese@cfdinvestments.com

 

“Here’s my prescription to cure your depression—get up, walk across the livingroom, turn off the TV, and go outdoors!”

 

  

 

DID SOMEONE SAY GUARANTEED LIFETIME INCOME WITH DEATH BENEFIT TO HEIRS? ….from above

How would you purchase a contract? You can invest as little as $5000 of qualified money - IRA, 401k, 403b, Roth, etc. If your account is to be non-tax qualified (regular ‘savings’ type money) then $10,000 is the minimum. This gives you an account that can’t be altered or taken away. We could still wait until the dust settles to decide when and how you will move forward with retirement – but this account would be open as a “placeholder” to create a future income stream for you. You would have the ability to add more money to it if/when you decide to turn on income.

It is VERY EASY to put all of this on hold while we (the world!) waits to see what will happen with the economy, jobs, the stock market, our health, etc. Believe me, we get it. 

We would be happy to talk with you in person, over the phone, or on a Zoom video call to discuss this with you. As always, Faith Investment Services believes in a no-pressure approach. Maybe we could have a conversation and you could decide from there.

Call us at 419-358-4207 or email Kathi (kathi@myfaithinvestments.com) to find out how to start a conversation.

According to www.protectedincome.org,80 percent of non-retired Americans are at least somewhat anxious that their savings may not provide enough to live on in retirement.

Average monthly expenses for American households, age 65 and older: After-tax monthly income $3,795, Monthly expenses $4,180—don’t be a statistic!

The guarantees associated with Annuity investments are subject to the financial strength of the issuing insurer and the specific terms and restrictions of the applicable policy or contract. The insurance features do not guarantee that the investment will not fluctuate in value.

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My staff and I just had a discussion about our last newsletter, which invited you to our “In Case I Die” seminar, scheduled for late April.  Of course, right after we sent that newsletter, a pandemic of epic proportions reached us, people were faced with the reality that they could or would die(!), events were postponed and later cancelled and our seminar had to be cancelled as well.  In the blink of an eye, our well-planned newsletter became an “April Fools” edition!

There are a number of take-aways:

  • Proverbs 16:9 “We can make our plans, but the LORD determines our steps.”
  • None of us knows the day or the hour of our death—or of possible economic disruption!
  • There are ways to prepare for the unexpected, but we rarely think the unexpected will befall us.

Everything we sent in that newsletter still pertains. You need a will. You need end of life directives that give loved ones the right and ability to help you. It is wise to have life insurance. You should talk to your adult children about your financial situation and make inheritance questions easier for everyone. The recent COVID-19 pandemic has not changed any of that.

However, the “new normal” that we’ve all recently experienced as a result of COVID-19 has highlighted even more areas where we should wisely prepare. Can I list a few of them for you:

  • You should build margin into your daily life (stock a few extra rolls of toilet paper, have a few extra roasts in the freezer!) Don’t live “down to wire” when possible.
  • Develop social capital with your neighbors and friends. Know who needs you and who you need—and cultivate those relationships. We would do well to take care of our neighbors and our community of friends even after this all blows over.
  • Learn to be resourceful. The “Use It up, wear it out, make it do or do without” mantra is very practical. Do you need a mask? Make it out of a bandanna. Do you have 2 potatoes and some canned meat in the pantry? Make hash. Relearn (or learn for the first time) the important life skills that your grandparents lived by.
  • Assess unnecessary recurring payments you make. Do you need or even benefit from all of the things you subscribe to?

This is a great time to take stock and invest in your financial future. For many of us, this latest economic downturn was the worst we’ve experienced. Recent years had lulled us into thinking that the economy would expand forever—and this was an abrupt awakening! 

Call us today if you’d like to participate in an assessment of your situation. Knowledge is power!