[Narrator] Question: What's a smart strategy to help grow my retirement savings? Allianz answers.
These days, given the rise in costs of retirement, growing your savings can help provide more of the money you'll need. That's why you may have invested a portion of your savings through a financial professional or through a 401(k) plan or personal IRA. Since you want your retirement savings to increase in value over time, you may think the smart idea is to just pick investments that have the biggest growth potential. In other words, you think investment should be like Babe Ruth, the legendary home run hitter for the New York Yankees.
But here's the thing, every time Babe Ruth got up to bat, there was no guarantee he'd hit a home run. In fact, he actually had more strikeouts than he had home runs over his career. How many more strikeouts? Almost twice as many more. That's why baseball teams can't just rely on power hitters like Babe Ruth. They need to diversify their team with other players who can be counted on for singles and doubles. That way, when your power hitters aren't knocking it out of the park, you've got others players whose results may be less dramatic, but will keep adding up over time.
It's the same for retirement savings. The investments with the potential for the best returns, the power hitters, tend to be the most unpredictable. Remember, no matter how successful an investment has been in the past, its future performance is never a sure thing. That's why financial professionals typically recommend a diversified portfolio to balance out investments with higher growth potential with other financial assets that can provide protection and more stability.
These other assets might include an insurance product, like a fixed index annuity, that can help build and protect savings and provide guaranteed income for retirement. Or, a fixed index universal life insurance policy to provide death benefit protection.
[On-screen disclosure] Guarantees are backed by the financial strength and claims-paying ability of the issuing company. [End of on-screen disclosure]
Both of these insurance products include the opportunity to earn interest annually based on the growth of an external index. What this means is you aren't actually invested in the market, and you can never lose money due to drops in the market.
[On-screen disclosure] You can allocated to one or more external indexes, a fixed interest option, or any combination you choose. Indexed interest potential may be limited based on certain factors. [End of on-screen disclosure]
So if you're looking for an insurance product for your portfolio, consider one that gives you opportunities to diversify among allocation options. Here too, you'll want options designed for higher growth, and ones for more stability, so you reduce the possibility of earning 0 interest in a given year.
[On-screen disclosure] Fees and charges may reduce value. [End of on-screen disclosure]
To sum up, diversification for your retirement savings can be as important as diversification on a baseball team. Yes, it'd be great if there was one option you could always count on for home runs. But, what you really want is a team that can work together to help deliver the results you need.
For help in creating a diversified strategy for your retirement goals, contact your financial professional. And, if you don't have a financial professional, you can contact us for help at AllianzLife.com.
[On-screen disclosure] For a financial professional to make any recommendation of securities and securities-related information, they must hold an appropriate securities license. [End of on-screen disclosure]
Allianz Life Insurance Company of North America (Allianz)
For complete information about fixed index annuities, ask your financial professional for a contract or Statement of Understanding that outlines the risks, fees, and expenses, as well as other information.
For complete information about fixed index universal life insurance, ask your financial professional for an illustration that outlines the risks, fees, and expenses, as well as other information.
Ultimately, a good strategy for each person will vary based on individual goals and objectives, and their tolerance for variable outcomes. It will be evaluated more by meeting expectations than by absolute performance.
Interest, if any, will vary depending upon the allocation option you choose. Choosing several allocation options (“diversifying”) does not ensure that interest will be credited. No allocation option provides the most interest in all market scenarios.
This content is general information for educational purposes, and is not intended to constitute fiduciary advice. Please consult your financial professional for a specific recommendation about purchasing this product.
Annuities are designed to meet long-term needs for retirement income. They provide guarantees against the loss of principal and credited interest, and the reassurance of a death benefit for beneficiaries.
Life Insurance policies include fees and charges, including surrender charges if the policy is surrendered during the surrender period.
FIA and FIUL policies involve surrender charges or other early withdrawal penalties, which may result in a loss of principal if you surrender your product prematurely.
And though an index may affect your interest credited, the product does not directly participate in any equity or fixed income investments. You are not buying shares in any index.
Distributions from annuities are subject to ordinary income tax and, if taken prior to age 59½, may be subject to a 10% federal additional tax.
Guarantees are backed by the financial strength and claims-paying ability of the issuing company.
With the purchase of any additional-cost riders, the contract’s values will be reduced by the cost of the rider. This may result in a loss of principal and interest (or gains) in any year in which the contract does not earn interest or earns interest in an amount less than the rider charge.
Products are issued by Allianz Life Insurance Company of North America, 5701 Golden Hills Drive, Minneapolis, MN 55416-1297.
Product and feature availability may vary by state and broker/dealer.
• Not FDIC insured • May lose value • No bank or credit union guarantee • Not a deposit • Not insured by any federal government agency or NCUA/NCUSIF
[End of on-screen disclosures]