Patrick Kelly said, “If I could give you just one piece of advice for building long-term wealth – just one – it would be this: never take a loss.” How much stress could you avoid; how many chiropractor, acupuncture, and massage appointments could you have eliminated if there was an exclusive retirement vehicle that had the ability to guarantee an income stream for life – an income you could not outlive. What if that retirement vehicle could also provide upside potential with no downside market risk?

The real rate of return is: objective, rational, and substantial.” – Rachel Marshall

There’s a financial and retirement myth that has been the benchmark for most stock market indexes and mutual funds for, dare I say, forever. It’s a myth that most financial professionals preach to their clients. It is the myth that, average returns tell an accurate story when it comes to your earnings. First, you should be fed up with the sleepless nights that the stock market volatility creates. Second, the following concept could be the most powerful tool you could grasp in order to take control of your financial future. The question is: if a person invests $1k into an account and the account experiences a -50% return in year one and +50% return in year two, how much money would be in the account at the end of year two? The average return is zero, right? If the average return is zero percent then wouldn’t the ending value be equal to the beginning value of $1k? The answer: not even close. The average return is zero percent, but the actual return is -25%! Let’s look at this a little closer: $1,000 – 50% = $500 (year one) and if that account had a positive 50% gain in year two, it would increase back up to $750 ($500 + 50% = $750). So, at the end of two years your average is zero percent, but your account experienced a twenty-five percent loss. The actual return and the average return will never equal one another anytime you have to factor in negative numbers.

Then the question becomes, how could any company afford to let your money increase when a market goes up and not allow you to experience losses when that same market drops? It seems as if it is just too good to be true. But it’s not. It’s very real and very possible. Indexed Annuities allow for a profit when the market goes up and protects your principal from experiencing losses when the market declines.

An annuity offers a unique way to grow your retirement savings portfolio

The vast majority of your annuity premium goes to purchase a balanced and diversified high-yield bond portfolio. However, not all of the premium goes into the bond portfolio. A very small portion of the premium goes to purchase call options on the index that the annuity is tracking. In short, call options make a profit when a market goes up. Call options exponentially increase in value when the particular index rises. If the index that these options are tracking go down, the small amount of money used to purchase the call options expire. Even in a losing year, the cost to purchase the call option is soon recouped by the income that is produced from the diversified bond portfolio. Simply put, the bonds provide the downside protection, and the call options provide the upside growth. None of your money is actually invested in the particular market the annuity is tracking. It provides a wonderful hedge against the longevity risk that retirement can present.

An annuity might be the perfect investment choice for you if you know your retirement goals