Safe Money - 3-29-25

Episode Transcript

Speaker 1 (00:00):
Good morning to all. Craig Shillig here and this is
Safe Money. I'm here every Saturday to talk with our
listeners about financial strategies we use to manage and protect
assets safely. I've been an insurance agent for over twenty
four years. During that time, I've learned a few insurance strategies,
like using annuities as safe money harbors, or using cash

(00:23):
value life insurance to supplement retirement income. Just a reminder,
you can call our office at five six three three
three two two two zero zero if you'd like to
enroll into one of my virtual Medicare community meetings. I
give those via zoom. I give two every month, or

(00:44):
you can email me at craigat Craigshillig dot com and
that's my name, cr Aig at cr Aig scchi l
L dot com. Today, I'd like to discuss a theene

(01:05):
Athene's Performance Elite fixed indexinuity. This is a cool product
that's out there. Athene their offices in West des Moines,
and I'll talk more about it here in a second.
But a couple of neat things about Athene. One, they
have two types of asset allocations that use artificial intelligence AI,

(01:31):
and so basically the AI computer UH picks the stocks
and it's UH. They have a global one and they
have one that just deals with US S and P
five hundred and UH. It's it's a really neat UH.
It's a neat product that's out there in athene performance.

(01:52):
Elite fixed indexinuity maybe right for you if you want guarantees,
growth potential, a premium bonus, protection, tax deferral income, and
a death benefit. So you can choose the certainty of
a fixed rate of interest that is declared each year

(02:14):
by the insurance company and subject to minimum guarantees. Your
annuity will always have a minimum guaranteed contract value, meaning
you can't lose any money. You always have a guaranteed floor.
You can pursue additional growth with interest credits. They're based
on part of the performance of an external market index

(02:36):
a then performance a lead. Annuities include a bonus that's
applied to the money you use to purchase your annuity.
There's no direct downside market risk to your money. Annuities
provide the advantage of tax deferred interest accumulation. You don't
pay taxes on any growth until you withdraw the money

(02:57):
at the annuity's maturity day, you have the option to
create a regular stream of income, either for a certain
period of time or for the rest of your life.
Your annuity can offer your loved ones a quick source
of funds to settle matters after your death, and you
can protect and grow your retirement nest day so whatever

(03:22):
life sends your way. The primary purpose of a theme
Performance Elite fixed index annuities is to help you accumulate
money for retirement. They feature a variety of interest crediting
strategies that are designed to grow your money and help
protect you from market downturns. But growing your savings doesn't

(03:43):
mean giving up access to your money. A Theme Performance
Elite Plus annuities include a liquidity rider for an additional
charge that gives you an additional flexibility should the need arise.
A Theme Performance that's Elite Plus also provides an enhanced

(04:04):
premium bonus which will give an immediate increase to your
annuities accumulated value. The Premium Bonus. The Athene Performance Elite
annuities include a premium bonus that is credited at the
time of issue and provides an immediate increase to your
annuities accumulated value. The bonus and or earnings on the

(04:25):
bonuses are subject to a premium bonus vesting adjustment schedule.
Here are some strategies you can choose from to determine
how interest gets credited to your annuity. You can do
a fixed crediting strategy. You can do an index crediting strategy.
With an index crediting strategy, you receive an interest credit

(04:49):
linked in part to the performance of an external market
indency like S and P five hundred NASDAQ, just to
name a few. A cap rate, or and or a
participation rate established at the start of each index term
period is used to calculate any interest earned. Credits are

(05:12):
applied at the end of each term. Indexed interest crediting
strategies include guarantee protection from loss due to market downturns.
While you may receive a zero interest credit at the
end of a term period, you will never receive less
than zero, meaning your principle will always be there. There's

(05:37):
an optional strategy charge. You can get a higher cap
and participation rates are available for an additional fee, but
they would allow you to get more credit interest on
your account for an additional charge. There's also a strategy

(05:57):
charge credit a one time strategy charge credit, and it
will be added to the accumulated value at the end
of the withdrawal charge period. If the sum of all
strategy charges applies minus the sum of all interest credits
isn't equal or better, let's talk about the strategy preset.

(06:21):
Strategy Preset is a unique hands free option designed to
harness diversification potential through broad index exposure, allow for personalization
through preset options the best meet your return profile. It'll
automatically allocate your premium to a predetermined blend of index strategies.

(06:46):
It automatically rebalances each year to target that blend. Over time,
you still have the potential to earn interest credits every year,
and you can help optimize performance through the additional use
of a longer crediting terms and or strategy charges. The
strategy Preset within this product is actually pretty cool because

(07:07):
you can if you want to, you can set it
and forget it. There's three buckets out there. There's a conservative,
a balance, and an aggressive one. But remember, you're never
going to lose your floor. It's kind of neat and
depending on your old period, whether it's seven years or
fifteen years. It doesn't matter the strategy preset you set it,

(07:31):
look at it on your anniversary, but there's really nothing
you got to do. You don't really have to reallocate
anything because the computer and the algorithm will do it
for you. It's kind of a neat neat option that's
out there. It's commonly described as not putting all your
eggs in one basket. Diversification has a proven strategy to

(07:53):
pursue growth and managed market risk in any economic environment.
Understanding the concept, however, may be easier than putting into practice.
With a growing number of index options, how do you
know what to choose? What combination will help balance protection
and growth potential? How and when do you rebalance to

(08:13):
keep your goals on track? Strategy preset offers three built
in automated options. They let you take advantage of in
depth research and insight while simplifying your allocation decision, much
like setting your preferred channel on satellite radio or a
cable TV strategy presets provide access to a broader array

(08:38):
of indexed options that promote diversification within your innuity contract,
Simplified decision making and allocation management, ability to personalize choice
based on risk return objectives. How do you? Custom indices
drive value Benchmark indices are typically offered within a fixed

(09:02):
index annuity, but were created before fias were developed and
may not match the goals of today's retirees. In contrast,
custom index options were developed specifically for fias. They are
created using advanced technology, pre defined rules and automatic tracking

(09:24):
to monitor their effectiveness and performance. Unlike and actively managed index,
custom indices have preset criteria and and can react far
more quickly to changes in the market and or set
criteria the strategy. Preset options are designed around the custom

(09:48):
indices available in Performance Elite and simplify access to the
advantages custom indicies can offer simple yet sophisticated strategy. Preset
blends the custom index options available in your performance lead annuity,
giving you access to a sophisticated diversification strategy within a

(10:10):
single choice. You get the advantage of an in depth
analysis and testing while saving time both when choosing and
maintaining your allocation. You can choose from one to three strategies.
I talked about this already. There's a conservative, a balanced,
and a growth. Under the conservative, you can enjoy the

(10:34):
potential of index credits every year and the protection offered
by using a one year strategy. Under the balance, you
can experience the benefit of index credit laddering without the
hassle of manual maintenance annual crediting potential on portions of
your money with two year allocation rates under the Growth bucket,

(10:59):
you can access us hands free index credit laddering with
even more growth potential, potential for annual crediting and higher
rates for an annual strategy charge, so there's improved performance
potential consistent with fixed index anuities are generally credited each

(11:20):
strategy preset option locks and gains at the end of
each one or two year term. Gains earned cannot be
lost due to market downturn, giving you higher growth potential.
The Balance and Growth strategy preset options take this one
step further by automatically implementing the lattering method. Through these options,

(11:45):
you can access the benefits of laddering without having to
manually manage your allocation every contract anniversary laddering for additional
growth and possibility. By altering or laddering two year strategies,
you gain the growth potential of a two year strategy

(12:05):
with the potential for interest credits every year. In year one,
they will allocate the premium evenly between a one and
a two year strategy, but in year two, at the
end of the first contract year, they will transfer the
renewing value from a one year strategy to a two

(12:26):
year strategy. A Theme's indexed interest crediting strategies feature the
following benefits. Any interest earned is credited at the end
of the crediting period. Your interest credits are protected from
market downturns. Your money is not directly exposed to the
risk of the stock market or individual stocks. A theme

(12:49):
guarantees you will not lose money due to market risk
or losses. You can access your money when you need
it most. There's annual free withdrawals to them are going
to be ten percent of your principle. They provide penalty
free withdrawal privileges under they have a seven year annuity,

(13:10):
a ten, and a fifteen. Under the seven you can
do ten percent free withdrawal after the first contract year.
Under the ten and the fifteen annuities, you can allow
up to five percent in the second second contract year.
Each year, you may withdraw up to the maximum free

(13:32):
amount of your annuities accumulated value without a withdrawal charge
MVA and or any premium bonus vesting adjustment if applicable
rmds required minimum distributions or IRS mandatory withdrawals required for

(13:54):
qualified contracts such as an IRA, these withdrawals from your
annuity contract are considered part of the withdrawal free of
withdrawal charges MVA, your premium bonus festing adjustments for that
contract year. There's a confinement waiver. After the first contract year.

(14:15):
You can withdraw up to one hundred percent of your
annuities accumulation value. If you've been confined to a qualified
care facility for at least sixty consecutive dates and you
meet the eligibilitary requirements, There'll be no withdrawal charge or
MVA to qualify for this benefit. To receive the confinement waiver,

(14:42):
the annuitdent cannot be confined at the time your contract
is issued, and the confinement must begin at least one
year after the contract anniversary date. You can get a
terminal illness waiver. You can withdraw up to one hundred
percent of your annuities accumulated value if the annuitant is
diagnosed with a terminal illness that is expected to result

(15:05):
in death within one year and the annuitant meets the
eligibility requirements, there'd be no withdrawal charges or MVA apply
if you qualify for this benefit. This waiver is available
after your first contract anniversary and the initial diagnosis of
the terminal illness must be made at least one year

(15:26):
after the contract date. It also includes additional liquidity features
such shas enhanced free withdraws, return of Premium Benefit, enhanced annuitization.
So we'll talk about the free withdraws. There's a ten
percent free withdrawal under the ten and fifteen after the

(15:53):
first contract year. If you don't take any withdrawals in
a given year, you can do up to twenty percent
the following year for that contract, so year two would
technically be twenty, but every year generally ten. After the
fourth contract year, the cast surrender value will never be

(16:15):
less than the premium minus premium taxes and prior withdrawals.
Under enhance the nuidization, you may elect to surrender your
contract and apply for the accumulated value to one of
the five settlement options. There wouldn't be any withdrawal charges,
premium bonus vesting, or market value adjustments. Upon election of

(16:39):
this feature. Provided that one of the settlement options is
elected and the annuity payments commence. There is a writer charge.
There's it's called a liquidity writer. It'd be deducted from
your accumulated value during the withdrawal charge period. The writer

(17:02):
charge will be assessed when any of the following occur,
when you reach the end of the contract year, when
you take a withdrawal on the annuity date, upon surrender
upon the dative proof of death, or if the writer
is terminated. The writer may not be terminated during the
withdrawal charge period. Let's see. By selecting an index strategy

(17:30):
with a charge, yeah, you would receive a higher cap
or participation rate, which means you could get more money
higher interest credits into that value for the contract year.
Fixed index annuities allow you to pursue growth by allocating
your money among one or more interest crediting and strategies.

(17:52):
Index crediting and strategies give you the opportunity to earn
interest credits based in part on the upward move of
an external stock market index. Because you're protected from losses
in negative markets, cap or participate participation rates will apply
to any growth in the given index When deciding how

(18:16):
to allocate your money among index strategies, is important to
know which index will perform best at any given time.
That's why it's important to consider diversifying your premium allocation.
Often referred to as not putting all your eggs in
one basket, Diversification means allocating your money across several different

(18:37):
interest crediting strategies. This allows you to spread the risk
by limiting your exposure to any one index, increase the
probability of earning positive interest credits, seek more consistent returns
in volatile markets. You can take advantage of unique characteristics

(18:57):
of multiple index options that may be an effective way
to achieve your long term savings goals. You will never
lose money due to a stock market risk or losses.
Interest credits are locked in and cannot be lost due
to future market downturns. You get tax referred growth and

(19:20):
an income you cannot outlive. What indexes are available, so
the Athene offers several of them. The I mean you
can get one in s and P five hundred Nasdaq,
but two of the cool ones. One is AI powered

(19:40):
Global Opportunity Index it's called i goes AIGOS and there's
an AI powered US Equity index that's called APEX AIPEX.
Those two indices are again it's artificial intelligence which is
power those indices, and it's it's a it's a pretty

(20:05):
neat it's a neat indicy to be in. Because this
is an annuity, you also have options for annudization. You
can get several different types of payout options. Obviously, there's
also a built in death benefit that would transfer directly
to name beneficiaries when the annuity matures. A theme will

(20:33):
give you options to receive guaranteed lifetime income. The payment
amount will be based on your annuities cash trender value
and the annuitization option you choose. These options can be
based on a set period of time, your lifetime or
the lifetimes of you and a joint annuity. It's important
to note that once you choose to annuitize, the payment

(20:56):
schedule and the amount is fixed and cannot be altered
or change. So understand there are some product limitations. There
are some surrender periods withdrawal charges, etc. But again they
will honor our m ds. There is a built in

(21:18):
death benefit. There's a confinement writer and a terminal illness
waiver and we can talk more about that when we
get together. There's withdrawal charges. Withdrawal charge would come up
because the company has to invest your money on a

(21:41):
long term basis, so they need a timeframe on how
long that's going to be. That's why there's a difference
between the seven year, ten year, and fifteen year annuity
options out there. Your bonus is vested, but it's based
on your surrender charge, so understand that that's not walk

(22:03):
away money, but you can use that for annuitization or
lifetime payments. And MVA's market value adjustment applies to withdrawals
in excess of the free withdrawal amount and full surrenders
during the withdrawal charge period. If you take an access

(22:25):
withdrawal during the end of your withdrawal charge period, keep
that in mind and we can always talk about those
that normally comes up when we've bitten off more than
we can chew. Most of us budget on a thirty
or sixty day time frame, it's kind of hard for

(22:45):
us to budget on like a twelve month timeframe. So
when we set up free withdraws, you always have the
option of taking a lump sum, taking it semiannually, taking
it quarterly or monthly. All of my clients who take
them monthly or quarterly usually do pretty well. The ones

(23:08):
who take a payment in a lump sum or semi
annually sometimes come back to me before the end of
the year because they've gone and spent it and then
they're asking for more money. So that's sometimes when we'll
run into They want to take out and access withdrawal

(23:29):
over and above that ten percent. But we can talk
about that more when we get together. Don't forget. I
give monthly virtual meetings regarding Medicare for two different companies
every month. In one meeting, I will cover Medicare supplements
and I'll also talk about a standalone drug plan. That

(23:52):
meeting is usually a sponsored by well Mark. United Healthcare
is a sponsor. For the other virtual meeting, I focus
solely on Medicare advantage plans known as Medicare Parts C,
and I'll cover the benefits of that platform. Some of
my upcoming dates. You can call our office at five
six three three three two two two zero zero for

(24:15):
the zoom meeting codes and additional dates and times. My
next upcoming dates are going to be April fifteenth and seventeenth,
May tenth, and May twenty second, June seventeenth, and June nineteenth.
You're also welcome to email me at Craig at Craigshillig

(24:38):
dot com and that's my name, c r Aig at
cr Aig scchi llig dot com and I can send
you the virtual zoomlink meeting codes. This is Craig Shillig
with safe Money.