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The Spend More Money Retirement Plan!
Why You Don’t Need To Become a Miser In Order To Retire Successfully! Have you ever read a book or an article on money that made you feel guilty for buying an occasional $5.00 latte, going out to dinner once in a while or even taking a vacation? Or maybe you were trying to educate yourself on finance and [...]
Best Retirement Tax Savings Strategies For Rockford Retirees
Many people think that once they retire they don’t really need to worry about saving on taxes anymore yet nothing could be further from the truth! Before I get into some of the best tax-saving strategies for retirees don’t forget to check out my video on how to avoid one of the biggest retirement mistakes that most people make. Click [...]
How will rising interest rates affect bonds for Rockford retirees?
The word on the street says that interest rates are going to be on the rise in the near future. So, you might be wondering: How will rising interest rates affect your retirement? How will rising interest rates affect bonds and stocks? But wait! Before we jump into how rising interest rates could affect your retirement, you’ll also want to [...]
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Helpful Glossary
The Four Financial Advisor Business Models And How They Charge You
The Stock Broker
The Stock Broker business model is one where the Advisor does not charge you ANY fees at all and simply gets paid a commission for selling you a particular investment.
Mutual Fund / A Shares
Product may charge a Front end load of 3.75% to 5.75% on Average* as an upfront off the top charge in addition to annual management fees of about 1.44% per year**
Variable Annuities
Typically don’t carry a front end charge but in addition to annual management fees usually around 1% they may also charge a Surrender Charge of 6% or higher decreasing over a period of years if you take all of your money out.
Mortality and Expense Fees
Most Variable annuities also charge a fee for Life Insurance that can tack on an additional 1% per year or more on top of the other mentioned fees.
The Insurance Agent
The Insurance agent business model works very similarly to the Stock Broker Model above. The Insurance agent Advisor does not charge you ANY fees at all and simply gets paid a commission for selling you a particular Insurance Product.
Fixed Annuities
Most have a back-end surrender charge that decreases over a period of years. You only pay this charge if you take all of your money out early or withdraw more than the allowed percentage in a given year. Typically you have access to 10% without a fee.
- NOTE: Unlike Variable Annuities Fixed Annuities typically don’t have ANY front end or ongoing annual management fees or life insurance costs built in.
- Life Insurance: Most life insurance plans charge Front end fees and back-end fees as well as ongoing costs to cover the charge for the death benefits.
The Fee-Only Advisor
A Fee-only Advisor business model is one where the Advisor charges a fee for advice or for managing money.
The Hybrid Advisor
A Hybrid Advisor is a business model that is a blend of two or more of the business models above.