Discover Financial Peace Of Mind In Retirement

Consider A Future of Comparing Market Risk Verses NO Market Risk

Did you know, if your Mutual Fund has a 1.25% annual fee, that fee not only reduces your gains but also compounds your losses.  Last year if your Mutual Fund made; 5% minus the fee you made a total of 3.75%.  You are only keeping 75% of what the market gained.
And in the years your fund lost money, that fee adds to your losses.
Last year if you lost; -5% minus the fee you lost a total of -6.25%. So you are losing -125% of what the fund lost.
In a Mutual Fund you are not getting 100% of the market gain, but you are taking 100% of the risk of market.
How is an EIA different then other type of accounts?

  1. Annual Lock-In means that once you have earned a gain over the course of a year in the Stock Index, that gain is now “Locked-In” and cannot be lost or taken away by a future downturn in the stock market. (So you don’t give back gains and you never have paper losses.)
  2. Annual Reset means that each year on the anniversary date, the account resets to the value of the Stock Index on that anniversary day each year. This is critical in the event of losses in the Stock Market, because it eliminates the need to recover losses like you have to in stocks, mutual funds or variable annuities.

For example: Assume your account is linked to the S&P 500. And your anniversary date is March 18th. The value of the S&P 500 starts at 1,000, but the next March 18th the S&P 500 is at 800.
The annual lock in would preserve your principal and all of the prior gains from the years before. Protecting you from the -20% loss that everyone else had in their Mutual Funds, Stocks and Variable Annuities.
The annual reset would mean that all the gains for the next year will be based on gains of the S&P 500 from 800. Which is great news!
Because, while everyone else is recovering the losses they had from the year before; you are actually making new profits in your account, which will be Locked-In on the next anniversary date of March 18th.

Compare Market Risk VS. NO Market Risk

 Each Account Starts with $100,000
Stock Market/Mutual Fund 75% of the Gains
Year 1 +15% $115,000 +11.25% $111,250
Year 2 +20% $138,000 +15% $127,938
Year 3 +10% $151,800 +7.5% $137,533
Year 4 -10% $136,620 +0% $137,533
Year 5 +10% $150,282 +7.5% $147,848
Year 6 +15% $172,824 +11.25% $164,481
Year 7 -10% $155,541 +0% $164,481
Year 8 +15% $178,872 +11.25% $182,985
Year 9 -5% $169,928 +0% $182,985
Year 10 +20% $203,913 +15% $210,432

So, the person with the Stock Market account on the left took 100% of the risk of the Market. And still did not outperform the person who was not at risk to any market losses.
Note- the Mutual Fund growth reflects no fees, if a 1% annual fee is subtracted from the returns of the Mutual Fund, the ending balance would be just $185,596. (not $203,913 as shown above)
As you can see, an EIA does not remove you from the future gains of the market, only the future losses. Therefore earning 100% of the gains of the market is not necessary to do very well. What is important is to forever remove the losses from your account

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