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The Investment Gender Gap: Women Feel Ignored by Financial Advisors

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The Investment Gender Gap: Women Feel Ignored by Financial Advisors

In March, we observe Women’s History Month to recognize and celebrate the vital role that women have played in shaping American history. Indeed, women have made countless contributions to society, and yet, in one area, they still feel like outsiders: retirement planning. Although more women than ever are taking an active role in the family finances, they still feel that their needs are being ignored, especially by the male stock brokers and advisors who dominate the financial industry.

At Crash Proof Retirement, our mission is to foster an environment where men and women alike can improve their financial literacy and empower themselves to make the best decisions about their retirement planning. Today, we would like to share some information with you about why women feel ignored by their male financial advisors, some specific challenges they might face in retirement, and how they can become more financially literate.

Study: Financial Advisors are Failing Women

A 2019 study conducted by New York Life Investments’ Advisor Advancement Institute revealed some startling statistics about women’s attitudes toward their male financial advisors. The women surveyed said they agreed completely or agreed somewhat with all of the following statements:

  • Financial advisors treat women differently (40%)
  • Women feel patronized by financial advisors (36%)
  • Financial advisors are less likely to listen to investing ideas from a woman (30%)
  • Financial advisors push women out of financial conversations (28%)
  • Women have less access to financial education (26%)
  • Financial advisors find it hard to relate to women (26%)
  • Financial advising is a man’s world (24%)

Financial industry data supports the attitudes expressed in the study. Jobs research firm Zippia reported in 2023 that of the 241,225 financial advisors employed in the U.S., 72.3% of them were men, and their average age was 44. While the role of women in making household financial decisions has drastically changed in recent years, it’s clear that the attitudes of male financial advisors on Wall Street have not kept pace. This is a major oversight for a number of reasons.

According to BMO Wealth Management, 51% of personal wealth in the U.S. is controlled by women, while data from Forbes shows that 70-80% of consumer purchases are driven by women. It’s clear that women are making more money than ever before, and having more influence over household financial decisions, and yet they are still significantly less likely than men to invest the money they earn. This investment gender gap can be explained by the way many financial advisors fail to address women’s retirement planning needs, making them feel unwelcome in the investing world. It is also worth noting that most traditional financial advisors are focused on risk management, and are not in tune with the needs of people in or near retirement. They generally deal with younger people who are more risk tolerant, and fail to advise them to decrease their exposure to risk as they age. Older people who cannot tolerate any risk, and especially women in or near retirement, are clearly not having their needs met by financial advisors who recommend risky, securities-based investments. At Crash Proof Retirement we feel that anyone in or near retirement needs security more than anything, and women need to be especially cautious because of the special challenges they face when planning for retirement.

Womens’ Unique Retirement Challenges

In the 20th century, household financial decisions were more likely to be dominated by men, leading to the gap in financial literacy that still exists today. Data from the Financial Industry Regulatory Authority shows that women consistently score lower on financial literacy tests than men. Specifically, women of the baby boomer generation scored 0.7 points lower than men on a five-question financial literacy test.

This is unfortunate because women generally live longer than men. Married women who have relied on their husbands to make investing decisions may not be equipped to manage their own finances after their husbands pass away. 

How Can Women Improve Their Financial Literacy

If you are a woman who wants to learn more about retirement investing, we encourage you not to let your past experiences with financial advisors prevent you from getting educated on how to protect your retirement future. At Crash Proof Retirement, our CEO Joann Small understands all the challenges faced by women as they prepare for retirement. Crash Proof Retirement’s team of licensed independent retirement educators would be happy to speak with you, and are well equipped to help women deal with the unique challenges they face.

The three-step educational process employed by Crash Proof Retirement allows both men and women to better understand their finances and make informed decisions about their investments. In fact, we insist that both spouses be present at all appointments to ensure that they can learn and grow together. 

Our dedication to financial education is what sets our process apart from the methods used by traditional financial advisors. We also make it a point never to pressure anyone who comes into our offices. Our team will present you with the facts about investing in terms that you can understand, and if you decide to go in a different direction, we will be satisfied knowing that we helped you gain a clearer picture of your finances. While traditional financial advisors may try to talk over your head, our goal is to ensure you understand every aspect of the retirement investing landscape.

The Crash Proof Retirement System is so versatile that it can be custom tailored to prepare for all the difficulties women might face in retirement, including the loss of a spouse. Each Crash Proof Retirement System can even be adjusted as your situation changes. Our team is also always available to answer any questions you may have about income solutions, long-term care solutions, protection of principal, growth, and anything else related to retirement planning.

Call 1-800-722-9728 to discuss your retirement planning in Malvern, PA or anywhere else nearby. Saving for retirement as a woman carries its own set of challenges, but the Crash Proof Retirement team is here to help you empower yourself to build the retirement of your dreams.

Adjusting Your Investment Strategy as You Age

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There are three phases that every investor goes through as they make investment decisions during their life. While it would seem logical for investors to naturally progress through these phases, the truth is that many investors fail to adjust their investment strategy as they age. When investors have an investment strategy that is inappropriate for their age, they increase their risk of being financially overwhelmed, especially if they are invested in risk-based securities. Moreover, investors are not always cognizant of certain cost increases that are associated with getting older and often overlook the need for long-term care services. As a result, millions of Americans enter retirement and are immediately confronted with having to navigate the financial maze of uncertainty, while being blindly led by unscrupulous brokers who fail to provide fiduciary guidance in terms of reducing the risk of their clients. For this reason, it is essential for investors to understand the three phases of investing to properly adjust their investment strategy as they age. 

The Three Stages of Investing

The first stage is the accumulation phase. This is where the investor launches their career and starts to save money. An investor will stay in this phase for the majority of their working years before transitioning into the retirement phase. This transition typically takes place sometime in their mid- to late 50s. During this phase, investors will reduce their exposure to risk by transitioning from stocks, bonds, and mutual funds to vehicles that guarantee principal protection. The final stage investors experience is the transfer phase. At this point, the investor prepares to pass on their assets and their legacy to their heirs. The problem is that investors get stuck in the accumulation phase and instead of transitioning to safer waters, they are often advised to stay on the high seas of risk. 

Part of the reason why Americans over the age of 65 hold on to their high-risk stocks, bonds, and mutual funds is because they have a broker or financial advisor who fails to provide fiduciary guidance by recommending safer investments like those found in the Crash Proof Retirement System. While some investors have enough funds to weather the storm of market volatility, the majority of Americans unfortunately do not. Instead, American retirees lose years of precious growth time, which may cause a drastic change in their lifestyle that they may never recover from, given their limited timeframe in retirement. 

Lost growth during an investor’s retirement phase is far more detrimental than what a younger individual would experience during their working career. To represent this relationship between lost growth and recovery time, researchers at Retirement Media, Inc. studied the relationship between the number of years it takes for the stock market to recover after an annual loss. Our team tracked the S&P 500 index for 94 years, starting in 1928 and identified 29 instances when the stock market had a negative year. Of those 29 negative years, 14 were market crashes — a drop of more than 20% in one or consecutive years — with a median recovery time of 8.5 years for the market to grow back to its previous high. 

While recovery times vary for every market crash, there are an infinite number of variables that impact how long it takes investors to recover their nest eggs. In fact, there is no guarantee that an investor will recover when the stock market falls. This was evident in the early 2000s as investors were hit with two life-changing market crashes spanning from 2000 to 2002 and again in 2008 to 2009. These two crashes erased 14 years of precious growth time as the S&P did not reach its previous high until 2014.

Assuming an investor is able to recover 100% of what was lost during a market crash within the median time frame, those years spent recovering are wasted. More importantly, these are years that a retirement aged individual does not have, especially when living on a fixed income. When investors are young and take a financial hit on the stock market, they have time to continue making contributions to their investment accounts because they are earning an income. Retirement phase investors on the other hand are not as financially flexible because they aren’t actively earning an income and are more susceptible to complications with costly medical expenses and the damaging effects of inflation. 

Inflation and Poverty

Outside factors such as inflation and medical costs magnify the damage that can occur when a retirement aged investor leaves their nest egg at risk on the stock market. In fact, inflation is so high today that economists are calling it a “silent retirement killer.” One of the reasons why poverty rates among older Americans is over 9% is due to the rising costs of long-term care services, such as being placed in a nursing home or assisted living facility. For women, the poverty percentage is even higher and gradually increases as they age. Up to 65% for women over the age of 65 live at or near the poverty line, according to the Director of The Center for Retirement Research at Boston College, Alicia Munnell.

Contributing to these poverty rates is the immense cost of long-term care services. The Department of Health and Human Services statistics state that 70% of Americans over the age of 65 will need some kind of long-term care assistance, lasting for an average of 3 years. Investors have to account for these troubling statistics as they transition from their working years to retirement and reflect these trends in their investment strategy because investors who are unprepared face the risk of bankrupting their nest egg. Regardless of the stock market’s performance during their retired years, simply not being prepared for long-term care expenses has the power of depleting their nest eggs and pushing Americans into poverty. 

The Costs of Long-Term Care

While most Americans have experienced what it is like to have a loved one enter a nursing facility, far too many have a misconception that Medicare and Medicaid will cover the costs of their care should they fall ill or incapacitated. The truth of the matter is that Medicare covers skilled services from a physician that consists of restoring the health of the patient and does not cover long-term care services. Medicaid, on the other hand, does pay for long-term care services, but recipients must qualify by first depleting their assets by paying out of pocket for care — effectively putting themselves into poverty and having no other feasible way of affording care. 

Long-term care services are considered non-skilled care from a nurse or caregiver that assists with the activities of daily living for their patient. This includes such activities as bathing, eating, dressing, toileting, and transferring in and out of bed. Although the majority of care is provided in the patient’s home, there are nursing homes and assisted living facilities that can cost upwards of $100,000 a year in some states. The national cost of a private room in a nursing home, costs over $108,000 a year. Considering the average length of care is 3 years, a patient should be prepared to spend more than $324,000 on their care during that time in a nursing home. Since the average household retirement account value ranges between $350,000 and $430,000, according to the Board of Governors of the Federal Reserve System, the average cost of a nursing home alone would bankrupt an investors nest egg. Couple those retirement needs with a stock market crash, and it quickly becomes a devastating financial scenario for Americans in their retired years. 

You can read more about the importance of budgeting during your retired years by reading, “How Budgeting Needs Change During Your Retirement.” 

Protecting Retirees Nest Eggs

Americans over the age of 65 face a variety of challenges and dangers that could impact their nest egg and turn their dream retirement into a nightmare. After spending decades accumulating a wealth of savings, investors cannot afford to miss the transition from the accumulation phase of investing to their retirement phase. Although a market crash can take several years to recover from, investors who took the time to protect their nest egg with a proprietary Crash Proof Retirement System remained safe, with peace of mind, knowing that their retirement was secure when the stock market crashed in 2020 and again in 2022. 

Many investors who have an exclusive Crash Proof Retirement System also have peace of mind about long-term care expenses. After taking the time to meet with the team of licensed educators at Crash Proof Retirement, many Crash Proof Consumers have obtained long-term care protections, which gives them the security of knowing that should they need care, they can receive it from anywhere in the world without bankrupting their nest egg. 

To learn more about how you can protect your nest egg from the dangers of stock market volatility, call 800-722-9728 or fill out the form on our contact page to schedule an appointment today. You can also head to the official Crash Proof Retirement YouTube page to watch to over 300 testimonials from our over 5,000 Crash Proof Consumers who were once concerned about their retirement savings, but now have peace of mind. 

How Our Government’s Spending Addiction Will Trigger A “Day Of Reckoning”

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The United States is facing a growing crisis – a $100 trillion federal deficit and exploding debt totaling $17 trillion amongst everyday Americans. According to the most current data from The Federal Reserve Bank of New York and FINRA, mortgage debt has topped $12 trillion, credit card debt has surged over $1.13 trillion, auto loan debt tipped over $1.61 trillion, and medical and margin debt combined have reached almost $1 trillion. 

Former Comptroller General David Walker, who served as the nation’s Chief Accountability Officer and head of the U.S. Government’s Accountability Office from 1998 – 2008, oversaw the government’s books, and provides unique insight as to the grave nature of the debt situation not just in our country, but around the globe: “There are too many countries, including our own, that have become addicted to spending deficits and debt. The global economy is increasingly interdependent and interconnected, but we have to recognize the reality – you can’t continue to spend more money than you make, charge to the credit card, make promises you can’t afford to keep, without someday having a day of reckoning.”

When I asked Walker whether the ‘day of reckoning’ predicted by many economists would have come sooner without the federal government’s massive stimulus programs conducted over the past decade, Walker responded affirmatively, noting, “I think so, yes… I think the federal government had to do something in order to prevent the collapse of the banking system, but now we’re in a situation where if we have another recession, the federal government doesn’t have any more tools in its toolbox.” 

Echoing Walker’s sentiments is Andrew Huszar, the Federal Reserve employee who kicked off Quantitative Easing, which was the largest federal stimulus program in U.S. history back in 2008. Known as the “Quarterback of Quantitative Easing,” Huszar implemented the first wave of this policy, which involved purchasing $1.25 trillion worth of mortgage backed securities that had tanked the economy in 2008. 

While Huszar initially saw the value in implementing Quantitative Easing, he later realized the negative impact of the stimulus program on the country’s debt and apologized to the American people. He explains, “I believe in Government, but I believe in smart Government, and I think what The Fed is doing – it’s just not smart Government. If you think of the U.S. economy as a business, we’re not dealing with our issues. We’re just kicking the can down the road and this is probably not going to end well in a number of different ways.” 

Both Huszar and Walker are students of history and understand that debt and deficits have been at the heart of every market crash known to man. For example, according to the IMF, leading up to the Great Depression, debt as a percentage of our GDP spiked from 23% in 1914 to 80% in 1932, and a Banking Collapse shortly followed in 1933. Today, our national debt is over $34 trillion – a whopping 124% of the United States’ GDP. Additionally, according to Walker, this statistic doesn’t account for the tens of trillions of dollars worth of unfunded entitlement programs, bringing that figure to north of $100 trillion.

Instead of addressing our nation’s debt, our federal government continues to compound the issue. Since January 2021, more than 2.5 million undocumented immigrants have crossed the southern border, accumulating to an estimate of over 12 million undocumented immigrants currently living on the nation’s already overstretched financial resources. The financial burden of healthcare, schools, law enforcement, and other public services, without the infusion of new tax dollars, will fall on legal residents and citizens through increased taxes. How long can the everyday American float these costs? 

With the United States’ economy failing to produce the funds to pay government debts, taxpayers are taking on debt they can’t afford. Our government is adding expenditures on an already stressed system, so it is essential that we rethink fiscal and immigration policies to avert financial catastrophe. As history has proven: debt defaults lead to market crashes and depressions. Given the magnitude of the debt we’ve accumulated today, failure to address these issues will lead to financial turmoil that will crush Americans for generations to come.

– With All Truth

The Erosion of Justice Will Lead to The Erosion of Your Retirement Future

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At Retirement Media, Inc., we believe that justice is the application of law in any industry. Justice ensures fair treatment and upholds the rights of all individuals, regardless of their
socio-economic status, race, and background. When laws are not enforced and fail to deliver
justice, it erodes the very foundation of a just and equitable society, corroding all industries
including your financial portfolio.

Associate Professor of Finance from Temple University’s esteemed Fox School of Business, Dr.
Bruce Rader, taught business and ethics for over twenty years. He eloquently highlights how the lack of enforcement and justice within the financial industry led to a market crash that many Americans still haven’t recovered from:

“There was regulation in place that could have saved the debacle that peaked in 2007-2008.
There was no enforcement of those regulations. They can create all the regulations they want…
If you don’t have the regulation that’s enforced, then you have what they call a moral hazard
problem.”

A lack of enforcement of any and all laws can lead to a breakdown of morality that ripples
throughout society, perpetuating systemic inequalities and allowing for the exploitation of
vulnerable individuals.

Dr. Rader points out how advisors and stockbrokers in the financial industry capitalize on this
lack of enforcement, “One of the things is there’s perverse incentives because they get paid by
doing transactions. And that is problematic for people because you make more money the more transactions you do. Now, there are some people, if it’s enough money, their ethics may drop and some people have no ethics.”

He continues, “We live in a society where you find people saying, I want you to treat me morally, but I’m going to treat you legally, which presents a problem because from a moral point of view, there’s a difference in what I can get away with legally… Especially if you are an unscrupulous broker, what happens? They can take advantage of you.”

What we’re all seeing today in our beloved country, The United States of America, is a lack of
enforcing laws in our country, which will only intensify the lack of enforcing laws throughout the
financial industry.

– With All Truth

Truth Tracker: The Potential Consequences of Media Unaccountability on the Financial Industry (Part 1)

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In a world where the media operates without fiduciary duty and the absence of laws that strictly regulate its practices, the consequences on society, and particularly on the financial industry, can be far-reaching.

The potential harm is further amplified when considering that media outlets are owned by Wall Street. In this essay, we will discuss the implications of such circumstances and the detrimental impact they can have on the financial industry.

Media outlets play a significant role in shaping public opinion, influencing investment decisions, and ultimately, impacting the financial markets. When media organizations lack fiduciary responsibility, they are free to publish misinformation, misrepresentation, or even outright lies. In an environment lacking oversight, these false narratives can easily mislead investors and create unnecessary panic or euphoria, prompting drastic market reactions.

Media’s duty is not solely to report news; it also entails holding the financial industry accountable. However, in the absence of laws and regulations, media outlets might prioritize their own financial interests or their affiliations with Wall Street owners. Consequently, their reporting may be biased, skewed, or manipulated in ways that favor specific industry players. Manipulative reporting can impact stock prices, deceive investors, and compromise market integrity.

Moreover, without legal recourse, those affected by biased reporting or financial losses resulting from media misinformation find themselves without a means of seeking justice or restitution. This lack of accountability erodes trust in the financial system, discourages investment, and undermines the overall stability of the industry.

To mitigate these risks, it becomes essential for society and regulators to demand transparency, accountability, and ethical practices from media organizations. Enacting laws that regulate financial media, implementing oversight mechanisms, and promoting fact- checking can help ensure that news outlets provide accurate, objective information to the public.

In summary, the absence of fiduciary responsibility, coupled with the ownership of media outlets by Wall Street, creates an environment that allows misinformation, manipulation, and biased reporting to flourish unchecked. This poses significant risks to the financial industry, giving rise to potential market volatility, loss of investor confidence, and erosion of trust. Recognizing the potential consequences and taking proactive measures to establish oversight and legal accountability are imperative to safeguard the integrity of the financial industry. These actions are vital to ensuring fair and transparent reporting for the everyday retired investor who has worked a lifetime to secure their retirement future.

The Crash Proof Retirement System – A Safer Way to Save for Retirement

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crash proof retirement system

There are many strategies that Americans use to save for retirement and each one has different benefits and drawbacks. Some of these options include 401(k) plans, Individual Retirement Accounts (IRAs), mutual funds, target-date funds, and many other financial vehicles. In general, retirement savings vehicles fall into one of two categories: high-risk securities-based investments and fixed investments, most of which exist outside the securities industry. As you get closer to retirement, you should focus on mitigating risk to ensure your nest egg will still be there when you need it. 

Concerned About Your Retirement Investments?

If you are concerned about the safety of your retirement investments, you should know that it is possible to achieve a secure retirement. Crash Proof Retirement has helped more than 5,000 consumers in or near retirement take their nest eggs out of the risky securities industry and place it into guaranteed financial vehicles that protect and grow their money without the risk and fees of Wall Street. Read on to find out more about the Crash Proof Retirement System and how it can help you achieve the retirement of your dreams.

What is the Crash Proof Retirement System?

When the stock market crashed in 2008, millions of Americans all over the country lost an immense portion of their retirement savings. IRA and 401(k) plans alone lost more than 20% of their value – a combined $2.4 trillion. While younger investors were able to continue working and wait for the markets to recover, older workers who were nearing retirement had to delay and alter their plans and some unfortunately were never able to recover what they had lost.

Some Americans were forced to retire due to illness, injury, or other factors, such as losing their job and not being able to find new work. As a result, millions of Americans have entered retirement in the years since the 2008 financial crisis without the necessary financial resources. Although millions of Americans were left at risk with securities on Wall Street, others were protected from the crash. These investors had peace of mind while watching the stock market rollercoaster because they were protected with the Crash Proof Retirement System and continued to feel secure all throughout the 2010s, while remaining whole during the coronavirus crash of 2020.

So, how does the Crash Proof Retirement System work? 

Learn How the Crash Proof Retirement System Works

At Crash Proof Retirement, their team of licensed retirement phase experts have a fiduciary duty to analyze and educate investors about financial vehicles that are proven to be safe for consumers in or near retirement. They call these Crash Proof Vehicles because they guarantee that you will never lose your principal due to a stock market downturn. While the value of high-risk security investments can fluctuate wildly along with the stock market, Crash Proof Vehicles credit interest when the market is up and prevent you from losing your principal during market crashes.

The Crash Proof Retirement System provides other benefits for retirement phase investors like tax-deferred growth and the ability to activate guaranteed Crash Proof Income when you retire. Each vehicle in the Crash Proof Retirement System has a specific purpose and works in concert with the other vehicles in each individually tailored system, much in the same way that the individual components of an orchestra come together to create a beautiful melody. When you choose a Crash Proof Retirement, you can have peace of mind knowing that your nest egg will be safe no matter what is happening in the world.

Highlights of Crash Proof Retirement System & Education

Visit the homepage of Crash Proof Retirement to see videos on the following:

  • Peace of Mind with Crash Proof Retirement – Experience the unparalleled peace of mind provided by the Crash Proof Retirement System. Rooted in decades of research, it offers a secure foundation, shielding your retirement savings from market volatility and economic uncertainty. Rest easy knowing your hard-earned money is safeguarded.
  • Double Digit Interest Returns with Crash Proof Retirement – Learn how to unlock the potential of double-digit interest returns with the Crash Proof Retirement System. Its innovative approach, backed by sound financial principles, tracks the market for growth while prioritizing capital preservation, even in a low-interest-rate environment.
  • The Dangers of Variable Annuities – Learn about the pitfalls of variable annuities. High fees and market-linked risks can erode your retirement income in Variable Annuities. The Crash Proof Retirement System provides a safe alternative, emphasizing steady growth, downside protection, and fee elimination.
  • The Hidden Secrets of Mutual Funds – Discover the hidden secrets of mutual funds. Many investors are unaware that their fees and market vulnerability can hinder returns. The Crash Proof Retirement System offers a transparent, secure path with the potential for consistent growth.
  • Investing with no Fees – See how our consumers experience fee-free investing with the Crash Proof Retirement System. Unlike traditional options burdened by fees, this system eliminates expenses, allowing your money to work harder for you.
  • Crash Proof Retirement Educational Process – Learn how to navigate retirement planning confidently with the Crash Proof Retirement System’s comprehensive educational process. This one of a kind education will empower you to make informed decisions about your hard earned money.
  • Liquidity of the Crash Proof Retirement System – All of our consumers enjoy a balance of growth and accessibility with the Crash Proof Retirement System. While benefiting from steady returns and downside protection, Crash Proof Consumers have access to the money they need to maintain their lifestyle throughout retirement.
  • Crash Proof Consumers Who Missed the Crash of 2008 – Consumers who invested in The Exclusive Crash Proof Retirement System prior to the market crash of 2008 have a special appreciation for our system. They prioritized stability and resilience, safeguarding their retirement savings from the biggest financial catastrophe in modern history. They are living proof that the Crash Proof Retirement System delivers security, growth, and transparency, catering to modern investors’ concerns. It stands as an attractive option for a stable and prosperous retirement, providing peace of mind, impressive returns, and a secure path forward.

Learn More about Crash Proof Retirement

It is possible for anyone to have a Crash Proof Retirement. When you are ready, the licensed retirement phase experts at Crash Proof Retirement are ready to educate you about the proprietary Crash Proof Vehicles and how they can help you achieve peace of mind in retirement.

To learn more about the Exclusive Crash Proof Retirement System visit crashproofretirement.com or call 1-800-722-9728 and schedule your complimentary personal financial checkup today! 

Groundbreaking Documentary Sheds Light on the Retirement Crisis

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Groundbreaking Documentary Sheds Light on the Retirement Crisis

A documentary film has been sweeping the nation, revolutionizing the way investors are looking at retirement planning. “The Baby Boomer Dilemma: An Exposé on America’s Retirement Experiment” takes a deep dive into the lethal pitfalls of the retirement savings plans that all consumer investors were told were safe, while experts and advisors alike never exposed the true alternative solutions that lie outside of Wall Street and lead to a guaranteed retirement future. 

Throughout the movie, award-winning director Doug Orchard uses exclusive interviews with an army of the highest level experts in the financial industry such as the “father of the 401(k)” Ted Benna, who was hired to create the 401(k) back in the ‘80s, two world renowned Nobel Prize winners, and six distinguished Ph.D. economists from the top business schools, to expose the devastating cracks in the financial industry that have 401(k)s, IRAs, Social Security, and other retirement plans on the brink of collapse. 

An important message in this movie is the need for dependable guaranteed income streams that provide inflation fighters in retirement. One of the distinguished experts in the film, Moshe A. Milevsky, impressively earned a Ph.D. in business finance and a master’s degree in mathematics, and has been a professor at York University for 25 years. Milevsky takes the time to put the spotlight on widely known investments that most people invest in, like stocks, bonds, and mutual funds, saying they are, “nothing more than one big lump sum of money.” 

Milevsky is pointing out that, it doesn’t matter if you’re in stocks, bonds, mutual funds, or 401(k)s, advisors and experts alike will tell you you’re diversified with Wall Street, but they’re all in the same category – “one big lump sum of money” – risk investments. As most experts agree, you cannot have a guaranteed retirement future made up of a lump sum of risk investments. 

Edward Siedle is one of the most experienced former SEC attorneys and earned the SEC’s largest whistle-blower award. In the film, he sheds light on the truth about the hidden fees that compound the risk all Wall Street investors face. Siedle points out and cautions, 

“How much do 401(k)s lose when they pay excessive mutual fund fees? The answer is that half a percent or more a year in excessive fees causes your average American worker to have maybe 60% of what they would’ve.” 

One would have to ask, with the hidden ongoing fees in securities and mutual funds and the lump sum of risk most financial portfolios are made up of, how can the everyday investor have a guaranteed retirement future? Sadly, the responsibility is left to the people who know the least about investing – the everyday investing consumer.

Moviegoers will learn what all the experts in the film, and around the globe, tout as the best way to find the guaranteed income streams that so many Baby Boomers are missing: investments from the financial life insurance industry. These alternative investments, called fixed index annuities (FIAs), offer guaranteed income that is tax-deferred, with no risk of market loss. As Milevsky explains, this consensus among economists is a rarity in the financial industry. 

He says, “There seems to be only one area in economics where there’s almost consensus. Almost all economists, no matter what model or frame of mind they’re coming to the retirement dilemma with, they’ll say it’s a good idea to take a part of your nest egg at retirement and buy a guaranteed source of income otherwise known as an annuity.” 

The film’s most renowned expert, the late Dr. David Babbel, established himself as an elite Ph.D. economist after over a decade of rigorous training to earn his Ph.D., followed by a 25-year career teaching at the top business school in the country, the Wharton School of Business, which has held that number one spot since the school was founded in 1881. 

In 2009, the great Dr. Babbel and a team of six of Wharton’s top Ph.D. economists and two senior actuaries conducted a two-year in-depth study on FIAs titled “Real World Index Annuity Returns.” 

Dr. Babbel is quoted in the conclusion of his team’s study saying, “Since their inception in 1995, FIAs have outperformed corporate and government bonds, equity mutual funds, and money markets in any combination, not just one year, but every year through the study’s completion (Which includes enduring the market crashes of 2001 and 2008).” 

The conclusion of this study prompted this prominent economist, Dr. Babbel, to invest his own hard-earned savings into 14 FIAs of his own. He shares how important the FIAs that he researched are and explains the benefits he experienced for himself by saying in the film, “If you’re a good manager of your money, you shouldn’t get one annuity – you should get several. You get enough to live off of to get your basic income and that’ll get you through maybe 70 to 75. Then when you start running short of money, you have these other annuities that are growing tax-deferred.” 

Dr. Babbel goes on to explain a strategy called staggered annuitization in which he activated only seven of his 14 annuities when he retired, while the other seven were there for him to be activated as a guaranteed income stream when needed. While those accounts weren’t activated, they accrued interest, and provided market-like returns without market risk. 

He provides an example of how this staggered annuitization works by saying, “When my wife says, ‘Dear we need some more money,’ I say, ‘I have got a deal for you.’ And I turn on one of the annuities and woah, it increases our income by 25 to 30 percent for the rest of our lives.” After conducting thorough research and experiencing the benefits of these FIAs himself, we were surprised that he declined an invitation to discuss these investments on The Crash Proof Retirement® Radio Show back in 2011, and why he wasn’t sharing his research with the American Retiree elsewhere. 

The truth is, there was a conflict of interest. Companies like Goldman Sachs, survive and thrive selling risky Wall Street investments and don’t promote the safe alternatives that the best economists, including Dr. Babbel, know will guarantee a retiree’s future and income. 

Therefore, when economists graduate from globally respected universities like Dr. Babbel did, investment banks like Goldman Sachs swoop in, snatch them up, and put these recognized economists on their payroll through different boards. In Dr. Babbel’s case, Goldman Sachs appointed him the founder and leader of their Pension and Insurance Department. 

When Dr. Babbel was placed on Goldman Sachs’ payroll, a conflict of interest was created thus explaining why Dr. Babbel was unwilling to spread the truth about the investments he knew to be successful for himself and his family. 

Only when Dr. Babbel became terminally ill did he feel free of his conflict of interest with Goldman Sachs and agree to disclose how he invested his own life savings in investments that aren’t sold by Goldman Sachs – FIAs. 

Dr. Babbel lost his battle with leukemia in May 2021, just shy of the film’s release date. Knowing the severity of his illness, he pushed through production to leave a financial legacy by alerting the American public to the safe alternatives from the financial life insurance industry that guarantee his family and over 5,000 Crash Proof® consumers the guaranteed income, the principal protection, and the growth they need to guarantee their current lifestyle through retirement years. 

Crash Proof Retirement® would like to thank Dr. Babbel for the long-term relationship and for being a consumer advocate for the everyday investor, exposing these exceptional vehicles that came out in 1995, in this must-see documentary. Crash Proof Retirement® urges you to reserve your seat for one of Crash Proof Retirement®’s complimentary private showings of “The Baby Boomer Dilemma.” Seating is limited and registration is required. Call 800-722-9728 or visit crashproofretirement.com to reserve your seat.

What Happened to Silicon Valley Bank?

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In March, Silicon Valley Bank and Signature Bank became the second and third-largest banks ever to fail in U.S. history. Both banks, as well as Silvergate Bank, took just five days to collapse. This sent panic that rippled throughout the economy.

Signature Bank was popular within the cryptocurrency community. Silicon Valley Bank (SVB) was the 16th largest bank in the country and like Silvergate, had depositors who were heavily involved in the technology industry.

SVB’s deposit base tripled between 2020 and 2022 and they earned billions of dollars through the loans they gave to startup tech companies, but how they handled this financial success eventually led to their downfall.

What makes the banks so fragile?

Kris Mitchener, economics professor at Santa Clara University and research associate at the National Bureau of Economic Research says, “Banks are fragile because of their business model.”

Banks use depositors’ money to make investments. They use those returns as well as interest from loans they give to individuals and businesses to cover their expenses and eventually profit.

This business model is fragile because banks need a lot of money on hand should their depositors need it, but they often utilize risky investments to turn profits. If the banks take a loss on those investments when the depositors need money they then risk bankruptcy.

Most banks have depositors from a variety of industries, so if one industry falls on hard times, they still have depositors from other industries giving them money to keep the bank running.

Mitchener explains that in SVB’s case, almost all of their depositors were from the tech sector – a historically volatile field – and exceeded the Federal Deposit Insurance Corporation’s (FDIC) $250,000 insurance limit.

The impact of rising interest rates

Knowing that SVB lacked variety in their depositor base and seeing that they had a plethora of uninsured accounts, SVB tried to minimize risk by taking their new earnings and investing them into government bonds – considered to be one of the least risky investments around.

What they didn’t consider was the double-sided disaster rising interest rates would cause. As interest rates rose, depositors across the tech industry needed to withdraw their money to cover the increase in the cost of the debt they used to start their untested ventures.

Those withdrawals picked up pace after Silvergate Bank collapsed on March 8. Depositors who saw similarities between Silvergate and SVB rushed to remove their funds and liquidate accounts.

Most of SVB’s clients had multi-million or even billion-dollar accounts, and when they went to take their money out, it wasn’t there. The bank needed the money it invested in those 10-year treasury bonds to pay its depositors and remain solvent.

When SVB made those investments, interest rates were incredibly low. By the time they cashed out their bonds to pay depositors, interest rates were much higher, erasing the bonds’ value.

Lost money means lost customers

SVB lost about $1.8 billion selling those bonds, intensifying the panic and sending customers into a full-blown bank run the likes of which haven’t been seen since the Great Depression.

“One day you think banks are healthy and the next day you wake up and you think they’re insolvent. When those beliefs coordinate on that new equilibrium where you think the bank is insolvent, then people run those banks and those runs can happen really quickly. We saw the same thing in 1929,” Mitchener told Crash Proof Retirement and discussed further in his paper, “Arresting Banking Panics: Federal Reserve Liquidity Provision and the Forgotten Panic of 1929.”

After the run, SVB’s shares tumbled 50% in one day, its steepest single-day drop ever. SVB quickly collapsed on March 10, leaving depositors who didn’t run the bank stranded.

Depositors involved in these recent bank failures far surpassed the FDIC’s
$250,000 limit, but this time, the FDIC made depositors whole.

“[The FDIC was] concerned about the risks, people waking up to these risks, and starting to run other banks who have similar characteristics,” Mitchener says as to why the FDIC assisted depositors.

All of this shows that banks take more risk than we thought and large sums of money were never safe – not even government bonds were truly guaranteed. The sad reality is that this is poised to happen again.

How is this allowed?

After a similar rush of bank runs fueled the Great Depression, the Glass-Steagall Act was passed in 1933. This created the FDIC, limited the investment risks banks could take, and led to decades of tranquility in the banking sector. But in 1999, former President Bill Clinton repealed the act.

Now banks can take risks to increase their profit and if those investments fail the FDIC is your only protection. If your deposits surpass the FDIC’s insurance limit, you’re out of luck. If the Glass-Steagall Act was still in place, this wouldn’t happen.

SVB’s failed investments are a prime example of exactly what the Glass-Steagall Act was trying to prevent. Confidence in the safety of banks is essential to keeping the economy running. Failing to maintain that confidence has caused some of the greatest market crashes in history, and it all stemmed from failed investments made by banks.

What impact will this have going forward?

The recent FDIC bailouts helped stabilize consumer panic, but unfortunately, the FDIC can’t continue to bail out banks much longer.

Ross Levine, the Willis H. Booth chair in Banking and Finance at the University of California, noted that it’s possible the FDIC will have to borrow money to pay for this round of bailouts.

While the FDIC is not tax-payer funded, loans from the U.S. Treasury are. If the FDIC does borrow money to cover its bailouts, it’ll be printed by the Federal Reserve, leaving hardworking taxpayers to foot the bill.

If a bank isn’t safe, then what is?

The bottom line is that bank safety is a facade. Since the repeal of the Glass-Steagall Act, banks aren’t as safe as they once were.

Bank failures are just one of the many things that could crash the markets, but what’s more concerning for those who worked a lifetime is that the investments they once thought were safe are no longer.

Only investments in the financial life insurance industry are proven, through all market crashes and bank failures in history, to protect every penny of investors’ money and allow them access to their funds when they need it. The licensed consumer advocates at Crash Proof Retirement are experts in these under-utilized safe alternatives and will customize a system around your goals to guarantee the retirement dream you worked so hard for.

If you would like to learn more about The Proprietary Crash Proof Retirement System call 1-800-722-9728 or fill out the online form on our contact page https://crashproofretirement.com/crash-proof-retirement-contact/.

IRA Portability Rules

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Investors have the ability to move certain assets in order to create a financially beneficial environment for their retirement. Whether they are an account owner, a spouse, an eligible ex-spouse, or a non-spouse beneficiary, there are a number of options available when it comes to moving assets that belong to some type of IRA account or workplace retirement plan. These options include rolling over assets from one retirement plan to another, converting a retirement plan into a different type of retirement plan, and transferring funds between two similar retirement plans. When it comes to the portability of certain assets, there are some restrictions and stipulations that are occasionally updated by the Internal Revenue Service. For IRA owners, it is important to stay on top of these regulations to avoid any potential complications with your accounts.

Rolling over assets from one retirement account to another is typically done in one of two ways. The first is a direct rollover, in which case a plan sponsor, be it a 401(k), will write a check payable to an eligible traditional IRA institution, and the funds are rolled over into the new account. Since the money never physically enters the possession of the account holder, the IRS does not consider a direct rollover to be a taxable event. However, if the workplace retirement plan is being rolled over to a Roth IRA, the funds would be subject to federal income taxes prior to going into the account. 

The other way that funds can be rolled over from one retirement plan to another is indirectly. Instead of the original retirement plan, such as a 401(k) writing a check payable to the new IRA sponsor, the check is made payable to the account holder. When this is the case the account holder has up to 60 days after receiving the distribution to roll those funds over into an eligible IRA account. Since this type of rollover places the funds in the hands of the account owner, the IRS considers this to be a distribution from the original account, thus creating a taxable event. In order to avoid paying taxes on the distribution, the account holder must roll the funds into an eligible IRA account before the 60-day period expires. 

Furthermore, rollover funds must be reported to the IRS in your tax filing each year to avoid discrepancies and potential penalties if not completed correctly. It is also important to remember that a Roth 401(k) cannot be rolled over into a traditional IRA and a Roth IRA cannot be rolled over into a traditional 401(k) because taxes are assessed prior to the funds being invested in Roth accounts. Additionally, only one rollover event is allowed to take place per year and if the account owner is over the age of 72 and taking required minimum distributions, those mandated withdrawals are not eligible to be included in a rollover of funds. In the event that ineligible funds are rolled over into a retirement account, a penalty from the IRS would be assessed unless the problem is corrected. 

When an account holder wishes to move funds from similar retirement accounts like a traditional IRA from one institution to another traditional IRA at another institution, they would complete a transfer of funds. Fund transfers can only occur between two IRA accounts or 401(k) accounts that are exactly the same; therefore, an investor cannot transfer funds from a traditional IRA to a traditional 401(k), which would require a rollover of funds. Transfers are simple, non-taxable events that are facilitated by the two active plan sponsors. Thus, if an investor wanted to move a Roth IRA from one institution to another Roth IRA at a separate institution, they could do so by way of transferring the funds. 

The investor could also transfer the funds from the original institution to several other institutions as long as the account types were all the same — in this case, a Roth IRA. Unlike limitations on rollovers, an unlimited number of transfers can occur in any given year because the type of retirement account does not change and therefore the IRS does not consider the changing of institutions to be a taxable event. There is also no 60-day limit on transfers because the transaction is facilitated by the two institutions that are moving the funds. Furthermore, if required minimum distributions are being withdrawn from the IRA that is being transferred, the transfer can still be enacted because the type of account is not changing. 

There are, however, limitations on who can transfer and rollover funds. An account owner and the spouse beneficiary of an account owner have the ability to transfer funds between like accounts, as well as rollover retirement funds. Eligible ex-spouse beneficiaries, as well as non-spouse beneficiaries, only have the ability to transfer inherited assets between like accounts. 

The final way that assets can be moved from one retirement plan to another is by converting the funds of a traditional account into a Roth account. A conversion serves the purpose of taking a tax-deferred account like a traditional 401(k) or IRA and paying taxes on those funds at the present date so the money can grow tax-free in a Roth IRA for the life of the vehicle. This kind of conversion cannot happen the other way around, in which a Roth account would be converted to a traditional account because taxes have already been applied to the funds in a Roth account. Converting a traditional IRA to a Roth IRA can be completed similarly to a rollover in which the institutions can move the funds directly or indirectly. 

When a direct conversion occurs from a traditional account to a Roth account, there is no 60-day stipulation, however federal income taxes must be paid on the conversion of funds. If the funds are converted indirectly, just like an indirect rollover the current institution will write a check payable to the account owner and the owner will have up to 60 days after receiving the distribution to convert those funds to a Roth IRA, as well as paying taxes on the conversion. There are other stipulations when it comes to converting funds from a traditional account to a Roth account and that includes who is eligible to make that conversion. According to the IRS, conversions may only be executed by the account owner, a spouse beneficiary, or an eligible ex-spouse beneficiary. A non-spouse beneficiary only has the option to roll over the inherited funds, they cannot convert to a Roth account. 

The portability of IRA assets and the regulation thereof are constantly changing from year-to-year, and it is imperative that IRA owners and their beneficiaries stay up to date with the changes that do occur. Not doing so can subject you to penalties and create a potential tax nightmare. Moving your assets from a workplace retirement plan to an IRA, or simply moving funds between IRA accounts, can be facilitated by meeting with a licensed retirement phase expert who can ensure that the process is completed smoothly and accurately to avoid the potential pitfalls with the IRS. 

Global Insecurity on the Rise

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The fallout from COVID-era monetary policy continues to wreak havoc throughout the global economy as more experts are slowly, but surely, waking up to the reality that a global recession is all but inevitable. This includes the World Bank Group, who released an Equitable Growth, Finance, and Institutions Policy Note, in September, detailing the grim multi-year outlook ahead for the global economy. While food shortages, supply chain delays, and international conflicts have all fed the beast of inflation, the efforts made to quell the financial pain of Americans and others around the world have largely fallen short. In fact, the actions taken by American policymakers and the central bank have exacerbated complications with inflation and shortages. 

Previous Global Recessions

In the near century that has unfolded since the Great Depression, the United States has experienced 14 recessions, with the most recent taking place in 2020 during the COVID pandemic. Although the 2020 recession was dreadful for investors, it only lasted for a few months and quickly bounced back due to an unprecedented stimulus effort by the federal government. One would have to go back to the 2008 global financial crisis to witness a prolonged recession that was ultimately thwarted by quantitative easing.  

The monetary policy that has dominated the United States financial system since 2009 implemented a low-interest rate environment to encourage economic expansion without exceeding a 2% inflation target rate. By and large, the federal reserve was able to achieve these goals, but the growth was artificial; instead of experiencing a natural financial reset in the wake of the 2008 financial collapse, investors across the globe were lifted by an economic wave propped up on stimulus. In 2020, the global markets were tested by the COVID pandemic and when the government increased their stimulus to historic levels, the financial house of cards started to collapse. Now, after nearly two years of dismissing critics concerns about overstimulating the economy as fearmongering, central banks are admitting that inflation is devastating investors in the United States and across the globe. 

World Bank Group Prediction 

The World Bank Group conducted research which concluded that by making monetary decisions in a timely manner, central banks could have eased the difficulty of addressing inflationary issues. While this analysis may seem obvious, inflation was initially classified as transitory because modern day central bank monetary policy has primarily concentrated on the demand side of economic growth. Now, as a result of these issues being cast aside, the global economic community is facing a high-risk of destabilization. This deterioration of the global economy will take place over a long period of time as issues of food insecurity, political malfeasance, and international conflicts erode the security and stability of nation states in the short term.  

This ultimately guarantees that an inescapable ripple effect will extend global losses for investors. History has shown that every political and monetary policy decision has the potential to shift economies around the world. In 2020 and 2021 central banks pumped a record amount of stimulus into the global economy and unearthed the hottest inflationary environment since the 1970s. Prior to the pandemic, during the early years of the Trump administration, tariff wars with China and other countries impacted global imports and exports while trade deals were renegotiated. Countless foreign conflicts, real estate at home and abroad, and political upheavals throughout Africa and the Middle East over the years have all made their mark on economies and their investment markets. 

Given the issues that are currently impacting the United States and other countries around the world, the World Bank Group concluded that widespread inflation would cause global economies to painfully decline through 2024. The authors noted, “Recent consensus forecasts suggest that the global economy will experience its steepest decline in growth over the next two years following an initial rebound from global recession since 1970.” Researchers from the World Bank Group went on to argue that a global recession is inevitable as central banks from around the world engage in a synchrony of monetary policy tightening to slow economic growth and cool down inflation — which they say is likely to remain above 3% globally through 2024. 

Global Inflation Rates 

Currently there are a handful of developed nations, including the United States, that are struggling with high rates of inflation. According to Trading Economics, an online economic database that forecasts more than 20 million economic indicators, there are several countries in Europe experiencing higher inflation than the United States (8.2%) due to a global energy crisis, largely stemming from Russia’s invasion of Ukraine and a supply drought that dried up in the later months of 2021. 

Germany is among the notable countries in the group, who are currently dealing with their worst bought of inflation in over 70 years at 10%, while preparing for a very uncertain Winter season given their dependence on Russian oil and gas for heating and fuel. Other countries struggling with similar issues include: the Netherlands (14.5%), the United Kingdom (9.9%), Spain (9%), and Italy (8.9%). These high rates of inflation from developed nations throughout Europe are largely attributed to skyrocketing energy costs, much of which are a direct result of supply cuts from Russia in retaliation for Europe’s support of Ukraine. 

As these economic issues continue to persist, consumers all over the world will be forced to pull back from spending on goods and services, which will reduce global growth outlooks just as the World Bank Group suggested. While globalization connected the world through trade and commerce, it also linked the world’s financial problems in such a way that would resemble falling dominos. 

Protecting Your Nest Egg During Global Recessions

The abundance of issues impacting the global community makes it clear to those willing to pay attention that the economies of the world are tightening in the hands of inflation. Had central banks taken this issue seriously from the onset of the COVID pandemic, perhaps inflation would not be as devastating for investors as it is today. Due to their inaction and misguidance, inflation has no end in sight. This fact, however, does not mean investors cannot take the time to protect their hard-earned assets. Investors in the United States can meet with licensed financial advisors in Montgomery County, Pennsylvania or anywhere nearby to learn how a proprietary Crash Proof Retirement System can fight inflation with a structure of investments that will protect and grow their nest eggs during uncertain times. To learn more, call 1-800-722-9728 or contact a licensed retirement phase specialist online by filling out the contact form on the Crash Proof Retirement website.

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