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Jim Lentini: Protecting yourself from the economic pinch

Posted: June 29, 2009 4:27 p.m.
Updated: June 30, 2009 4:55 a.m.
How are you reacting to the current state of the market? How do you feel about the current U. S. economy overall? And, more importantly, what are you doing to protect yourself from the economic pinch?

Recently, a major insurance company set out to find the answers to these questions by interviewing adults nationwide aged 60 and older.

The study's aim was to gauge their feelings about the current economy and to inquire about specific actions, if any, that they are taking or considering as a result of the factors affecting our economy and its volatility.

The respondents to the poll, whether approaching retirement or currently in retirement, feel a great deal of vulnerability due to the serious economic situation.

Results show 82 percent are feeling a financial "pinch" and are cutting back on their spending.

Despite this, 73 percent do not plan to delay their retirement, and 21 percent of those already retired are now working or seeking employment because of the economy.

Surprisingly, only 23 percent of those polled say that in the last 12 months they have taken more positive actions on their finances.

What does this mean to you?
When extraordinary economic events occur, a lot of people may become discouraged and feel the urge to abandon their current retirement saving approach.

In fact, a latest report stated 31 percent of participants in retirement plans had suspended investing in the market.

It is important for you not to let short-term market fluctuations affect your long-term investment strategies.

This may be difficult due to the depth of issues we are dealing with, but with the proper planning and investment vehicles, we can deal with the issues, and protect those retirement savings.

Considering that today's retirees and pre-retirees can expect to live 30 years or more after retirement, there is a critical need to review your retirement plan and goals with your financial advisor.

You need to know that whatever happens in the market, the savings that you have spent a lifetime building will still be there when you need it the most.

How do you protect assets?
A variable annuity with an optional living benefit rider may be a good addition to your overall retirement portfolio.

Living benefit riders can help protect against market downturns and even provide guaranteed income for life, regardless of what the market or the economy does.

These safeguards against down markets may be the most important, and desired feature to you right now.

And, more than downside protection, you need your assets to continue their growth potential, regardless of what the market is doing.

The living benefit rider of some major companies will not only protect from the downside, guarantee a minimum growth rate net of all fees, but also take advantage of positive market performance by automatically stepping up when the market outperforms the minimum guarantee.

This allows you to maintain a long-term perspective with a disciplined investment plan, staying fully invested in the market with a diversified portfolio, knowing your principal is protected, guaranteed to grow for future lifetime income, and protected from the downside of market volatility.

This gives you peace of mind and confidence in your retirement plan and warrants your investigation and consideration in your retirement planning.

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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