This is probably the most important part of retirement. It is not necessarily the amount of money you have it is the amount of income you can get off of it for the rest of your life.
I was meeting with a client the other day and we were talking about the amount of retirement income he could get when he retired in the next ten years. He pulled out an excel spreadsheet that his broker put together for him and said I could get this amount of income in ten years according to my broker. I was in shock at the numbers the broker had told him, it was way too high! I asked if I could take a closer look at the sheet of paper with all of the broker calculations.
It made me sick what I saw. The broker had run a best, middle and worst case scenario for this guy.
- The worst case return he gave this guy in the next ten years was an 8% return.
- The middle case scenario was a return of 16% in the next ten years.
- The best case scenario was a 24% return over the next ten years.
If you are aware of the last ten years we had a negative return over a ten-year time period.
I do not know what this broker was thinking! None of those figures were even remotely guaranteed or even close to reality for a ten-year time frame. He was giving this guy such a false sense of hope and security it was not even funny! Unfortunately, this is not the first time I have seen this and I know it will not be the last. This was the truest form of IFcome. If the market had that kind of return and If the broker was telling the truth, he would be able to draw out that kind of income.
I only deal with products that have true INcome interest guarantees and provide a true Income that you can live on for the rest of your life. There are plenty of products that will provide Income, not IFcome.