How to Build a Sustainable Retirement Income Stream Without a High-Cost Annuity

MCLEAN, Va., March 12, 2012 /PRNewswire/ -- Femi T. Shote, MSF, ChFC, CFP®, Accredited Investment Fiduciary, founder of Asset Harvest Group, LLC and an independent financial advisor based in the Washington D.C. area, is on a mission to educate investors. In his recently-released special report for retirees and pre-retiree investors, "How to Build a Sustainable Retirement Income Stream Without an Annuity," Mr. Shote tells investors they do not need to purchase an annuity in order to create a steady income stream.

"In these uncertain times, investors are concerned about their retirement. They have seen their investments fall in value," said Femi Shote.  "Annuities are heavily marketed as safe alternatives to the ups and downs of the market. Naturally, many investors are attracted by the messages used by annuity companies such as 'guaranteed lifetime income' and 'steady growth,' especially as they seek a steady retirement income," added Shote.

"However, annuities are high-cost investments that restrict the financial flexibility that a pre-retiree or retiree needs," Shote continued. "Annuities may provide a predictable income stream, but the commissions to purchase and high annual fees associated with it have a large impact on a retiree's income.  Annuities also come with surrender charges; fees that a client must pay to end an annuity early.  In short, an annuity is a very expensive way to achieve a safe income stream," concluded Shote.  

INVESTORS SQUEEZED ON RETURNS

Investors are also squeezed on returns, according to Shote's special report. First, people are living longer, which means the benefit payout that an annuity could offer is going down.  Second, investment returns are lower than they were a decade ago. This means annuity companies have less money to make payments.  And a finally, annuity rates have dropped, because the Federal Reserve has kept rates low to try to stimulate the economy. Since annuity payouts are often pegged against widely used interest rates, this means that annuity rates are lower today than they were in the past.

THE SOUND ALTERNATIVE TO EXPENSIVE ANNUITIES

"The alternative to an annuity is fairly simple," Shote said. "A well-constructed investment portfolio, with an emphasis on Preferred Stocks, complemented with dividend-paying stocks and corporate bonds helps create sustainable retirement income streams, is a much better option.  Of course, the portfolio must also reflect an investor's financial situation, future needs and risk tolerance. It's not much different than what annuity companies do with their own investments—but it's done on an individualized basis for each client, and it's done without the hidden commissions and excessive fees that annuity providers charge," Shote emphasized.

THE LOOMING CRISIS AHEAD

"Baby boomers are starting to retire in large numbers, and the last decade has not been kind to their retirement portfolios," Shote said. "Annuities look attractive to people who do not have pensions and who realize that Social Security will cover only a fraction of their future needs. But high-cost annuities are NOT the way to build a sustainable retirement income stream. Investors should seek advisors who will look carefully at their specific income needs in retirement. They want advisors who are in it with them for the long run—not simply after a quick-and-easy annuity commission. The other problem is that most advisors know what to do but they are simply too lazy to do the investment research, implementation and rebalancing that will yield the best result. This is shameful," Shote said.

To download the complete report, "How to Build a Sustainable Retirement Income Stream Without an Annuity," click here: http://assetharvest.com/FemiShonteSpecialReport.html

About Femi Shote
Femi T. Shote, MSF, ChFC, CLU, CFP®, AIF®, founded Asset Harvest Group, LLC (AHG) in 2000, after more than a decade of working in the industry as a financial analyst and advisor.

Shote earned a Master's of Science in Finance in 1991 from Bentley University, Waltham, Massachusetts. He earned a Bachelor of Science (magna cum laude) in Accounting, Economics and Finance in 1987 from Roger Williams University, Bristol, Rhode Island.

SOURCE Asset Harvest Group, LLC