It’s the Income, Stupid!

A straightforward and sensible guide to investing so that after retirement you can still sleep at night. 

Congratulations.  

You are in a rare minority. You have saved and invested for your retirement.  But after decades of accumulation, have you thought about how to organize your portfolio once you begin de-cumulating?  Can you have a virtual paycheck to replace your former real one?  This book will guide you through a major life transition—assuring that your savings last at least as long as you will.

In It’s the Income, Stupid! Philip J. Romero, an academic who has shaped the economies of several U.S. states, and Riaan Nel, a wealth manager who helps clients transition into retirement, provide a street-smart guide to your money.  Get no-nonsense, no sales pitch advice about the types of investments to embrace—and the ones to avoid.  Many of the lessons about investing that were learned before the recession have been overtaken by events.  This book will help you plan your portfolio in the "new normal."

It’s the Income, Stupid! will provide a road map to this new world. But it doesn't stop there.  It also offers practical recommendations for structuring your portfolio so that it can provide you with a virtual paycheck once work no longer provides a real one.  It’s the Income, Stupid! offers unbiased advice about the vast range of investment choices you face, so you can assure that your investments meet your needs—and not a salesman’s.

Review
“Phil Romero’s trademark, experience combined with scholarship, makes this book important for anyone who wants to think ahead about our problems and approach them in an informed and constructive way.” 


– George P. Shultz, Secretary of State for President Ronald Reagan

Why an annuity? ‘It's the income, stupid’

Why an annuity? ‘It's the income, stupid’

Income guarantees are the ultimate annuity endgame.

When Bill Clinton was running for the presidency in 1992, James Carville came up with one of the most memorable campaign statements of all time. "It's the economy, stupid."

It was so simple and to the point, that it stuck in the minds of voters and was the tag line for Clinton's eventual winning run to the White House.

Taking a page from Carville's blunt verbal playbook, I want to say to all investors, retirees, baby boomers, skeptics, and voters;"It's about the income, stupid."

Yes, I'm calling you out and poking you in the financial forehead as a reminder that income guarantees are the ultimate endgame. It's time to stop exclusively chasing growth, and to start implementing some foundational income guarantees. By the way, I don't think you’re stupid. Blame Carville ...

Finish building your guaranteed income floor

With markets continuing to skyrocket, maybe this is a good time to complete that income floor you've been meaning to install. Stop procrastinating and stop justifying the eventual need for guaranteed income.

Social Security guarantees income for life. Your pension guarantees income for life. Annuities can contractually fill the needed gaps for your remaining income for life piece. Even the staunchest annuity hater will admit that annuities are the only transfer of risk strategy that guarantees an income stream that you can never outlive.

Income floor now

If the guaranteed income floor needs to be implemented right away, you really have only two choices: Single premium immediate annuities, SPIAs, and charitable gift annuities, CGAs. Both provide a lifetime income stream, and are efficient no-annual-fee gap fillers for your foundational income floor.

Both of these income now strategies contractually solve for immediate “flooring” needs. It's always best to quote numerous issuers for both SPIAs and CGAs, then choose the one that best fits your specific situation.

Income floor later

Building a guaranteed income floor for use at a date in the future can be accomplished using deferred income annuities, aka longevity annuities, or income riders. Both can contractually solve to the penny your desired future income guarantee.

Deferred income annuities are simplistic future income plans. No annual fees or moving parts, just a pure transfer of risk. Income riders are lifetime income benefits that can be attached to variable or indexed annuities. Look at the highest contractual guarantees from both strategies, from at least five carriers, and then primarily base your decision on the highest guaranteed number.

Income debt free

For the disciplined and fortunate who are completely debt free, remember that feeling when you finally achieved this incredible goal. You are beholden to no one. You don't owe anyone a penny. What a personal victory that most will never experience.

That same cathartic feeling happens when you have contractually covered all of your foreseeable income needs. If you have a significant other, building a permanent income floor for their life as well is one of the greatest legacy gifts you can ever provide.

Add one more word, James

Let's hope that some annuity promoter doesn't hire James Carville to become their exclusive annuity carnival barker. He wouldn't be the first political consultant to take that horrible annuity advertising plunge. You wouldn't believe who that person is if I told you.

So as you begin to see James Carville start commenting on Hillary's Presidential run, picture him saying "It's about the income, stupid."

And then add one more important word and say to yourself, "It's about the guaranteed income, stupid!" It really is.