The money aging factor
By Paul Cross
Annuity National Brokerage Co.
The long established Financial Rule of 100 offers a guiding light, a safety guide, for investors of all ages but especially for the 50+ age group.
The Financial Rule of 100
Subtract your age from 100 and the difference is the maximum percentage of investment capital that one should permit to be at risk. Note the word maximum, not the minimum, permitted to be at risk.
Risky investments are not for everyone. It is dangerous for everyone who violates the financial rule of 100. At age 55 (100 – 55 = 45) permit no more than 45 percent of your investment assets to be in risky investments and move 55 percent to safety and as you age, move more and more to safety.
Want to do away with the math? Try the money aging factor — your age is the factor. Your age tells you the minimum percentage of your investment capital that should be safe, guaranteed and re-insured investments.
“I’m more interested in the return of my money than the return on my money.” — Mark Twain
Here’s my gambling success formula: Gamble with no more today than you can afford to lose today. At the race track, in the Casino and on Wall Street, gamble with no more today than you can afford to lose today.
Where should I invest my retirement plan?
Retirement plans should be in safe places with guaranteed growth. You give up all of the tax incentives relative to risky investments when you invest qualified retirement plans in risky investments.
Avoid the IRS forced liquidation sale at a loss of which you can never, ever, recover. At age 70 1/2, we are forced to take the required minimum distribution (RMD) from qualified retirement plans. The RMD dollar amount is based upon the value of the plan as of December 31st of the prior year. In a year when the market is down, we must liquidate a larger number of stock shares from mutual funds and securities at a loss of which we can never recover on the shares sold.
The golden years of retirement now require more gold. Golden bonus annuities can provide more income, more growth and less tax. Annuities offer an ideal place to invest qualified retirement plans with guaranteed growth and guaranteed income you cannot outlive. Guaranteed income forever. Now that’s peace of mind — sleep insurance for the golden years of retirement.