Market News 

Here is an excellent chart on consumer price changes in past 20 years. The biggest jump was in healthcare and education, and was significantly higher than 55.6% increase in CPI. Nobody knows how high prices of healthcare and education will go in next 20 years, but I know buying life insurance products is a way to hedge them for both the senior and the young.

Benefits of buying insurances are not only to provide security and safety, but also to eliminate dependency.

Question: What is Annuity?
Answer:   Annuity is a pension guarantees lifetime income and lifestyles after retirement.

Annuity is a great product to diversify your investments and put your retirement money into a guaranteed bucket for life-time income. There are different types of annuity product. Some of annuities may be suitable for taking lifetime income at age 60s while others are good for lifetime income at age 70s and beyond. The return of Fixed Index Annuity depends on the performance of its index strategies.

S&P Multi-Asset Risk Control (MARC) 5% Excess Return (SPMARC5P) (NA) (vs S&P 500 (SPX))
S&P 500 Low Volatility Daily Risk Control 5% Index (SPLV5UT) (NA)
Morgan Stanley Dynamic Balance Index (NA)

J.P. Morgan Mozaic II Index (NW)
NYSE® Zebra® Edge Index (NW)
MSCI EAFE Index (EAFE stands for Europe, Australasia and Far East)

BNP Paribas Multi Asset Diversified 5 Index (BNPIMAD5) (Athene)
Nasdaq FC Index (Athene)
AI Powered US Equity Index (Athene)
S&P 500 Daily Risk Control 5% Index (SPXT5UT) (Lincoln, Athene)
Janus SG Market Consensus Index (SGMDJMCI) (Athene)
Morningstar® Dividend Yield Focus Target Volatility 5 Index (MSDIHDVA) (Athene)

Bloomberg US Dynamic Balance II Index (BXIIUDB2:IND) (Allianz)
PIMCO Tactical Balanced Index (TBI) (A)
Bloomberg US Dynamic Balance II ER Index (BTSIDB2E:IND) (A)
PIMCO Tactical Balanced ER Index (TBIER) (A)
BlackRock iBLD Claria ER Index (IBLDCLRE) (A)

Morgan Stanley Global Opportunities Index2 (Delaware)
First Trust Capital Strength® Barclays 5% Index (Delaware)

ML Strategic Balanced Index (MLSB) (AIG)
PIMCO Global Optima Index (GOI) (AIG)
AB All Market Index (AIG)

Question: Do I need to buy long term care (LTC) insurance?
Answer: LTC costs are not covered by Medicare and LTC costs increase each year.

70% of people age 65 and up will need long-term health care (the Wall Street Journal, 2006). Genworth.com has annually published LTC costs from its surveys for 15 years. The 2018 report shows about $5,000 per month is needed to stay in a good LTC facility in Phoenix metro. The number could be double in 20 years assuming annual inflation rate is 3%. This why covering LTC is a very important part in retirement planning to protect your wealth. Here is a screenshot from Genworth website.

When insurance company will pay LTC claim? If the insured is unable to do two of six activities: Eating, Dressing, Bathing, Using the toilet, Transferring (to or from bed or chair), Caring for incontinence. Fidelity had a good article explaining LTC and costs.

Question: Is an Indexed Universal Life (IUL) 7702 plan better or is a 529 Plan better?
Answer:   It depends. In some situation, IUL 7702 plan is better, especially if you are a conservative investor.

The investment choices for a 529 plan is limited. As you can see in the Fidelity Arizona 529 plan, most funds' performance just beats inflation marginally in the period of 10 years.
That means it might not give you the needed return to pay for college tuition if you do not select riskier funds. Higher return bears higher risk during market down turn.

The alternative is Index Universal Life (IUL) insurance. The cash value in IUL contract is credited by the performance of index strategies. Index strategies in IUL have floor to protect investment from any stock market lose and have good upside (or uncapped) potential. IUL is excellent in asset protection and has tax-free feature. It may provide a higher return than some 529 plans in which available funds are limited and to whom invests in an in-consistent way. But IUL does have costs of insurance associated with it. All below companies have good IUL products or annuities.

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"Wide diversification is only required when
investors do not understand what they are doing.
 - Warren Buffett
Phoenix Master Financial LLC
4025 W. Chandler Blvd, Suite 3
Chandler, AZ 85226