|
|
First Senior Financial Group
Sets itself apart from all other financial firms
# 1 We only work with people in retired years.
#2 We will never put your investment accounts at market risk.
# 3 Our financial model works in any market environment.
Securities, such as stocks, bonds, and mutual funds, put your nest egg at risk of losses and carry ongoing fees that are too costly for retirees. Also, most well-known safe investments are subject to erosion. That means that inflation coupled with low yields and taxation on accumulation greatly diminishes your money's purchasing power over time.
If you weathered a market crash while you were working, you probably didn't worry for three reasons:
a) In the Accumulation Phase, while you were still working, you had a paycheck keeping up with inflation. Conversely, retirees are on a fixed income and don't keep up with inflation with their pension and/or Social Security checks during the Retirement Phase.
b) During your working years (the Accumulation Phase), you were still contributing to your retirement accounts. This allowed you to participate in the markets whether they were up or down, and when they were down, you were able to buy in at a low cost, and this is a tremendous advantage. When the markets rebounded, you benefited greatly. Because American retirees are not working and are on fixed incomes, many can't take their Social Security or pension checks and invest them into the markets when prices are low, and thus lose that significant investment advantage.
c) In your working years (the Accumulation Phase), you had plenty of the most important investment element: time. When the markets declined, you still had a sustained period of time to grow your accounts back from losses. Most people in the Retirement Phase don't have the investment time to recoup market losses, nor a second chance to go back to work to grow and harvest another nest egg. If your nest egg is at risk, you could be looking at an extended period of time before your money comes back. Will that affect your standard of living in retired years?
You might think a market crash isn't very likely, but did you know that the markets have experienced 15 serious crashes since 1929? That averages to a crash every 5 years. You also might think that bonds are safe, but try telling that to people who bought Enron, WorldCom, or Orange County California bonds. Those bonds all defaulted within the last 15 years. It's estimated that another 5% of bonds will default in 2008, in part due to the sub-prime mortgage credit disaster.
You might also think that traditional “safe” accounts will preserve your nest egg. But if you have your money in banks, CDs, or even money market accounts, your savings are eroding. If your yields aren't at least 5% or more, you have a good chance of eroding your nest egg throughout your retired years. In other words, the purchasing power of your money is dwindling faster than your accounts are growing.
|
|
