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Jim Lentini: Retirement in this business climate

Business commentary

Posted: December 27, 2010 9:55 p.m.
Updated: December 28, 2010 4:55 a.m.
 

As businesses get ready to close the doors on 2010 and evaluate the new year and the direction of their business, indicators show 2011 is hopeful for future growth. Business owners continue to look for ways to save money, and preserve and protect their businesses and employees.

California small-business owners anticipate a rebound during 2011. A recent poll by a major insurance company shows that 52 percent of entrepreneurs surveyed in the Golden State expect sales to increase next year, compared to only 29 percent who predicted an upswing in business when polled a year ago.

Forty-eight percent of California’s small businesses have plans to expand their business over the next 12 to 24 months, compared to 45 percent nationally. This is promising for our drastic unemployment rates here and across the nation.

These increases mean that business owners may be less preoccupied with keeping their heads above water in 2011 and more willing to contemplate longer-term subjects like retirement for themselves and their employees. 

A number of businesses in 2010 had to reduce or change their 401(k) plans and pension plan contributions due to reduction in business revenue. Unfortunately, this is occurring when most business owners and employees are trying to make up for time and investment principal lost during the Great Recession since December 2007.

We all experienced the downside risks inherent to financial markets. The lessons of 2008 and its aftermath have taught investors to appreciate steady, secure returns. In the volatile, unstable economy and deficit spending of government we are experiencing, it is imperative we have confidence and peace of mind about our retirement planning, and the deposits we make of our hard earned money saved for future delivery to provide income for us when we stop working.

 Make sure when you review your investment planning with your financial adviser, you discuss and consider some portion of retirement funds in variable annuities with guaranteed income benefits.

This is the only investment I’m aware of that can guarantee principal, future value, growth and lifetime income you and your spouse cannot outlive. With these special riders only available on a variable annuity, you can capture all the upside of the market, and have protection from the downside.

And also very important in estate planning, annuities provide probate protection, and successor options not structured in other market investments. These are the items that give you peace of mind and feeling secure about retirement assets.
I know these products have been mentioned before in articles, but then variable annuities with guaranteed withdrawal benefit riders have proven themselves during the Great Recession in their short lifetime.

Read the article about them in the Wall Street Journal printed in July 2009. Remember what Will Rodgers said in 1933 after the Great Depression started in 1929, and it still applies today, “I’m not so concerned with the return on my money, as I am with the return of my money.”

 I hope we all enjoyed the holidays with family and friends, and look forward to a healthy prosperous new year!
Jim Lentini, CLU, ChFC, IAR is president of Lentini Insurance & Investments Inc. He can be reached at (661) 254-7633. His column reflects his own views and not necessarily those of The Signal.

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