The Top Three Custodians of Retirement Funds are Wall Street, Banks, and Insurance Companies.

The Top Three Custodians of Retirement Funds are WallStreet, Banks, and Insurance Companies.

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Wall Street, the custodian that offers the greatest level of uncertainty, is a major concern for retirees and pre-retirees. The lack of a Federal Bailout, when prospects lose their Retirement Savings, is a significant worry. Many retirees and pre-retirees are grappling with the lack of stability in the markets and have experienced substantial losses in the in retirement accounts. The current high-interest rates have further exacerbated the downward pressure on the world markets, adding to their concerns.

Banks are FDIC-insured, BUT how can the FDIC guarantee your prospect’s money is safe if the current bank issues are systemic and spread to the largest banks? According to Forbes, 465 banks failed between 2008 and 2012. The list includes the largest bank, Washington Mutual, which had $307 billion in assets. And more recently, Silicon Valley Bank's failure on March 10, 2023, with $209 Billion in assets, and First Republic Bank on May 1, 2023, with $212 Billion in assets. Researchers from Columbia, Stanford, the University of Southern California, and Northwestern wrote in a working paper published by the National Bureau of Economic Research that there is currently a 10% to 20% default rate on commercial real estate loans, equivalent to between $80 billion and $160 billion in bank losses.

Insurance Companies, unlike Wall Street and Banks, provide Annuities that offer guaranteed principal, guaranteed income, and peace of mind. These companies are inherently stable due to statutory reserve requirements, reinsurance requirements, and mandatory membership in guaranty associations. During the same period of time (2008 through 2012), when 465 banks failed, only three annuity providers failed, showcasing the reliability of annuities over other retirement fund custodians.

With the current turmoil affecting Wall Street and Banks, there has never been a better time to talk about the safety and guarantees annuities can provide. For an Appointment call Danny at 475-257-1807.

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