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THE HAFEN FINANCIAL
Dee Dee Hafen relies upon experience going back to 1996 with thousands of clients to help individuals, couples, and families manage their assets and maximize retirement income. She understand that markets and economies change, so she offers solutions that reduce risk and maximize growth during almost any sort of economic conditions. She can even offer tactics that can significantly increase social security income and reduce taxable income.
While many clients seek out Dee Dee for retirement income planning, she can also help with other goals. These include preservation of wealth, planning for college, and other personal financial goals. She holds active licenses in securities, long-term healthcare insurance, and life insurance.
Retirement Income Planning
fixed index annuities
maximize social security
“Change your money from forever taxed to never taxed”
retirement income planning
Each day the Retirement Integrity Resources team creates Social Security benefits analysis and retirement income strategies reports for individuals who desire not to run out of money in retirement. Dee Dee Hafen and her team of professionals develop strategies for couples and individuals who desire to minimize risk in the markets yet have secure lifetime income.
For over 20 years, Deirdre “Dee Dee” Hafen has endeavored to help eastern Washingtonians successfully plan for retirement.
Dee Dee has spent her entire career working with individuals, like you, who are nearing, or already in, retirement. She understands your unique needs and how you can’t afford unhappy retirement years trying to recover from heavy losses in a risky market.
You need consistent and secure lifetime income. You need to protection of your accumulated assets . You need your lifetime savings and Social Security to go to work for you in retirement.
Do you want to find a safe haven that will still provide you with good returns on your savings and not expose you to any losses? Consider financial products that use a unique tactic called indexing to calculate the rate of return. Basically, indexed products offer you a chance to enjoy positive returns and an opportunity to minimize or even totally eliminate risks. In fact, many of these financial vehicles come with guarantees that you will never lose a cent.
In the past several years, you have probably seen how volatile the market can be. Stocks, bonds, and even money markets and mutual funds might be hot one year and decline the next. If you want to keep your principal and previous gains but never worry about losing money, you may want to learn more about the way that indexing works.
In short, indexed financial products link their rate of return to a major index of the market. The S&P 500 is one of the most common examples. When the index increases, so will the value of your asset. At the same time, you will have a guarantee that you can lock in past gains and not lose your principal during a year when the market declines. Some products may even offer you a fixed rate during down years, so you’ll actually make money when people who invest in securities lose money.
If you think this sounds like a retirement planner’s dream, you might want to consider these three typical indexed products:
- Market-based CDs: Instead of offering a small, fixed interest rate, these CDs peg their rate to a market index. The FDIC protects your principal.
- Indexed annuities and indexed universal life: Insurance companies offer these two indexed products. Government regulations and the financial strength of a major insurer protect your asset’s value.
Is There A Downside To Indexing?
By now, you may wonder why everybody doesn’t role their nest egg into one of these safe money products. The downside for some investors is that products that rely upon indexing are usually only really productive for long-term savings; however, they aren’t a good solution for people who might have to draw their money out early. However, if you have cash that you want to use for long-term retirement plans, future college funding, or other financial planning, you should learn more about different indexed financial tools.
All annuities are financial products that allow their owners to save and grow money that might be used as income in the future. Because people may have different financial goals, financial institutions have developed different kinds of annuities. In order to learn more, consider this brief summary of the different annuity types.
Different Types Of Annuities
All annuities offer tax-free growth and are considered a way to save and grow money to use as income. Most annuity advisors will group annuities into two basic kinds that can serve different kinds of savers:
- A deferred annuity allows you to make contributions years before you plan to take any income out. You might make an initial contribution and periodic contributions after that to grow your nest egg over time. People might use this product to help with advance, long-term planning for retirement, college costs, and other similar needs.
- With an immediate annuity, you might begin withdrawing income soon after you make a lump-sum contribution. Very often, people who are already retired use this kind of financial product to turn their savings into retirement income. The amount of money you can withdraw may depend upon the terms, the value of your account, and life expectancy.
Fixed Vs. Variable Annuities
Beyond these two distinct types, it’s also important to make a distinction between fixed and variable annuities:
- Fixed annuities: Fixed annuities will guarantee a return even if stocks, bonds, or other bank interest rates decline. The simplest fixed annuities offer a fixed return rate.
- Variable annuities: Variable annuities don’t guarantee growth but might offer more potential growth. The value of investments, like stocks, bonds, money markets, or funds, within the account determines the account’s value.
Sometimes also called indexed annuities, equity annuities are a kind of fixed annuity. Instead of offering a fixed return, the returns are pegged to a market index, like the S&P 500. When the market rises, owners may have a chance to earn better returns. Typically, equity annuities also guarantee that the owner won’t lose money during down years, and some of these products offer a guaranteed rate of one to three percent when the market declines.
Because it’s tough to predict lifespan or expenses, some people may use some percentage of their savings to purchase a longevity annuity at retirement. This deferred annuity can continue to grow while the owner uses other sources of retirement savings or interest. This product acts as a sort of insurance policy against outliving savings or having unusual expenses.
Before you purchase a certain type of annuity, it’s usually prudent to try to anticipate income requirements, risk tolerance, and products available on the market.
fixed index annuities
We hear the same question about retirement planning from many of our clients in Walla Walla, Washington, Kennewick, and Richland, Washington. They want to know how they can enjoy good returns upon their retirement savings while minimizing risk. Safe savings products, like savings accounts and most CDs, offer low-interest rates these days. Very often, the returns won’t even keep up with inflation. Meanwhile, our clients understand that they might enjoy higher returns from securities, but they will also have to take big risks. One solution that we can offer our clients is called a fixed index annuity.
Understanding Fixed Index Annuities
There are two basic things to learn first about fixed index annuities:
- Since they are fixed annuities, they come with a guarantee that locks in previous profits and principal, so annuity owners don’t risk losing money. The annuity company will offer this guarantee in the original contract, and it is backed up by the company’s financial strength and strong insurance regulations.
- Companies use a market index to calculate returns, so they can perform very well when the market does well. Most commonly, annuities use the S&P 500, but some products use other indexes or even let the owner select an index.
When the index increases, the index for the annuity will also rise as some percentage of total gains. To understand how much value the stock will gain, it’s also important to consider the participation and cap rates of each individual product:
- Participation rate: This is how much of the gain the owner can benefit from.
- Cap rate: Some fixed index annuity products also cap the total profits.
How do annuities compensate owners for not realizing maximum gains? When the index decreases, the guarantees kick in. Some products even offer a two or three percent fixed return as a guarantee for down years. Even though the annuity owner won’t make quite as much as he or she would by owning that stock, the owner also won’t lose anything if the stock declines. In fact, when the market decreases, annuity owners may still make money when people who put money in securities, real estate, and other investments lose money.
Do you want a retirement planning tool that can still help your earn positive returns over time? If so, speak with Dee Dee Hafen about fixed index annuity products in Kennewick, Richland, or Walla Walla, Washington.
maximixing social security
Many of our clients in Richland, Walla Walla, and Kennewick, Washington tell us that social security will probably make up a substantial portion of their income. In fact, the official Social Security Administration website says that Social Security income replaces about the 40 percent of earned income for the average retired American. At the same time, most retirees miss the chance to maximize social security benefits just because they don’t even realize they can.
Tips To Maximize Social Security Benefits
Why do retirees leave money on the table when they choose how to take Social Security payments? Many retirees believe in a couple of myths:
- They believe that the only thing they need to figure out is how and when to enroll, and that the Social Security Administration will tell them everything they need to know.
- They don’t think that there is anything they can do about their Social Security income after they have begun to collect payments.
Both of these myths can cost retirees hundreds of thousands’ of dollars over their retirement years. First Social Security employees aren’t allowed to act as advisors; they can tell you where to find the rules, but they can’t help you interpret them to your benefit. In addition, many people fail to consider the significant financial implications of other taxable income or when they choose to start collecting their payments.
Learn To Make The Most Of Social Security
Do you want to maximize your Social Security benefits? If so, you could read thousands of rules and many thousands of pages that explain them. You might take an easier approach and educate yourself with books like “Get What’s Yours” by Dr. Laurence J. Kotlikoff, a distinguished scholar who has distilled the essence of these rules into a very digestible publication for people who want to educate themselves about Social Security.
Of course, we hope you also consult with our retirement professionals. Based upon your unique financial situation and retirement goals, we will help you choose the right approach to your hard-earned Social Security payments and any other financial tools that can benefit you. Your comfortable retirement doesn’t solely depend upon how much money you have made in the past or even how much you have managed to save. It largely depends upon making wise decisions with your savings and the way you collect income.
tax free retirement
In the past, financial advisors may have suggested putting savings into tax-deferred products. The logic they relied on was that you needed tax breaks more during your working years and would not require as much income during retirement. They might also have predicted that since your income would be lower after you stopped working, your tax rate would also decrease. However, past experiences with taxes, the economy, and retirement have demonstrated that this kind of thinking has some serious flaws.
Why Plan For A Tax-Free Retirement?
There are three solid reasons to plan to earn tax-free retirement income:
- Unpredictable expenses: With rising costs for housing, healthcare, utilities, and many other essentials, nobody really knows how much money that they need for a comfortable retirement income.
- Unpredictable tax rates: It’s impossible to predict future tax rates, and they could increase.
- Social Security rules: If you earn too much taxable income when you collect social security, the IRS could potentially tax as much as 80 percent of that income in some cases.
If you can plan for tax-free retirement income, you obviously won’t have to worry about paying taxes on that money. This kind of income doesn’t get reported to the IRS, but it’s perfectly legal. In addition, you can also lower your tax rate on the taxable income you may receive because you can pay taxes in a lower bracket. Even if you can’t protect all of your income from taxes, you might consider protecting a share of it.
How To Plan For Lower Income Taxes In Retirement
We can explain strong financial products that can provide you with tax-free access to cash, tax-free benefits to heirs, and tax-free growth accumulation. In addition, these financial tools will guarantee your principal and past returns while providing you with market-linked growth. You will be better off if you can pay lower taxes in retirement, and we can help.