Do you have questions about annuities? Or maybe you're just curious as to how Ty J. Young Inc. operates?
We've created this Ty J. Young FAQ page to answer some of the questions you may have and to provide insight into our retirement investing philosophy.
There are different tips and tricks to saving money, but sometimes it’s simple. Paying down high-interest debt such as credit cards will help you save money. Everyone also needs an emergency fund because you always have unforeseen expenses, Most advisors recommend an emergency fund equal to three to six months’ worth of your expenses, depending on the volatility of your job. Ty J. Young Wealth Management recommends that you max out your tax-advantage accounts like 401(k)s, IRAs, and 529. Read this article on what to do with savings, https://www.businessinsider.com/personal-finance/what-to-do-with-savings.
Investing your money in your 20s means you’re getting a head start of most people. Get help managing your money from experts who can help guide you to make the right decisions. For example, you may be able to take advantage of employee benefits such as 401(k) and matching benefits. If a 401(k) isn’t an option, see if you meet the income requirements for a Roth IRA. As time goes on, you want to incrementally raise your savings rate.
Real estate can generate passive ongoing income and can be good long-term investment if the value increases over time. However, you will need to put down a significant amount of money upfront in order to invest in real estate. Check out this article on how to successfully invest in real estate. www.thebalance.com/is-real-estate-a-good-investment.
Middle class homes make up a large portion of America and there’s a way to help protect your nest egg. Adjusting your lifestyle to your income level by setting realistic financial goals is a good first step. Then make a plan to set aside money for investment. It seems simple, but saving your monthly income and investing regularly makes a world of difference. Since taxes absorb a significant portion of income, you want to strategize on effective tax planning. Avoid buying depreciating assets, in other words, spend smartly.
Starting to invest your assets is always exciting. The best way to begin is deciding how much you want to invest and understanding your investment options. These may include stocks, bonds, guaranteed insurance contracts, mutual funds, and exchange-traded funds. Then, you want to pick an investment strategy that best fits you. Check out this article www.nerdwallet.com/article/investing/how-to-start-investing on how to start investing.
Credentials are a good starting point, and the advisor’s experience is often equally as important. You should trust and respect your financial advisor. Good advisors listen to your needs, goals, and concerns. You can research the company reviews to see what customers are saying about the financial advisor. Word of mouth and online recommendations are useful tools as you determine whether or not the company or advisory is suitable for you.
If you have a 401k available to you, utilize it for tax-smart efficiency. Employers often match a portion of your contribution to 401k, making them even more attractive. If you’re self-employed, you should fund your SEP IRA first. In general, look at tax-smart ways to invest your money. But taxes should be a secondary consideration to economic decisions.
AUM generally refers to the securities that a firm manages for a fee. Total assets can also include more than AUM, including cash, CD’s, Guaranteed Insurance Contracts, annuities, and the cash value of insurance policies.
Yes and no. While some annuities may have high fees, the best annuities do not charge annual fees. To learn more about annuity myths, read this post by our top financial advisors on common misunderstandings of annuities
Yes. However, your investment tools depend on your strategy. Bonds are a more conservative investment strategy and they historically have lower returns than stocks and less risk. However, they are still a risk-associated investment as bonds can and often lose money. If you’re looking for an asset group that makes money in the good times but also does not lose money in a down market, you should also consider accumulation-focused, fixed indexed annuities as an alternative to bonds. Fixed indexed annuities guarantee that you won’t lose money due to stock market fluctuations. And, the right annuity can also provide you a reasonable rate of return with no annual fees.
Yes. The most astute investors often use benchmarks, including ETFs, to gauge the performance of their other investments.
Typically, wealthy people mitigate risk very well. While the average person might believe you must take more risk for more reward, the wealthy understand that you must be more strategic for more reward. The wealthy often focus more on the return of their money, rather than the return on their money, as they strongly dislike losing money. Learn more about how to invest like the wealthy in this article with tips from Ty. J. Young Wealth Management.
Just like we hire doctors to guide our health, everyone needs a financial advisor to guide our financial strategies. However, many top financial advisors have minimums, so consider creating a budget and get disciplined about saving $10K to invest, and then find a financial advisor to guide your financial strategies.
Yes, billionaires often have a team of financial planners and financial advisors. The more money an investor has, the bigger the need and appreciation for a top financial planning firm or wealth management team. A top financial advisor can help guide people away from misguided decisions for wealth management. Learn more about how to invest like the wealthy in this How-To Guide from Ty J. Young.
So you don’t want to pay taxes when you move your IRA? Good news – you don’t have to pay taxes. At Ty J. Young Inc., essentially what we’ll do is set your index annuity up as an IRA. Then, we can take your current IRA and transfer the money from your current IRA to your index annuity that is an IRA without taxation and without fees. You don’t have to pay taxes when you move your IRA.
Is there a prospectus for a good index annuity? The answer to that is no. A prospectus is a document that is required to be given to you if you are about to buy an investment where you can lose money. A security, for example, requires a prospectus. Now, a good index annuity is not a security – it is a guaranteed insurance contract. Your principal is guaranteed against losses. So, no prospectus is needed here. The way it works is first you’ll receive an application then once the money transfers you’ll receive your policy book. All the terms are stated and known upfront and then you’ll actually see them in writing on the contract. You have something called a free look period. The times vary depending on the state, but it is at least 10 days usually. During this time, you can look at your contract to make sure it is exactly what you thought, and if it’s not, you can give it back—get your money back—without penalty and without fees. Folks take a lot of comfort and solace in knowing they have the free look period working to their advantage.
When you reach the age of 70.5 you are required by the IRS to take out the required minimum distribution. If you don’t take it out, they penalize you. You can always take your required minimum distributions out of your index annuity without penalty.
Certainly you can get an index annuity from your local broker. But be aware: there are some 39 companies that offer you and I—the investing public—index annuities. That represents hundreds and hundreds of different products. Four or five of those insurance companies do it well. At Ty J. Young Inc., we call them top tier insurance companies. Essentially, the very best companies and the very best products encompass about 15 products. With so many different permutations it can be hard to achieve what you’re looking for. When someone needs an operation on their brain, they go to a brain surgeon. When someone seeks safety of principal, they come to us. The reason they choose us is because we are experts in this field. We know what we do, and we work hard to be the best at it. We live, eat, and breathe safety of principal and reasonable rate of return.
Well, sometimes people misunderstand. The 6 to 8% is a historical average rate of return. Some years when the stock market goes down, it might be zero. Some years when the stock market goes up big, you could make as much as 25%, depending upon the account that you choose. But the historical average rate of return is about 6 to 8%. That’s an average, not a guarantee.
It comes down to a number of different factors. Your rate of return is determined not only by the crediting method, but also by the anniversary date. There are 365 different anniversary dates in a year, so the returns are going to vary based on those anniversary dates and the crediting method. Historically, the very best accounts are averaging between 6 and 8% through the maturity of the account.
At Ty J Young Inc., we never charge you a fee. Here’s how it works. The insurance company makes money by using your money over time. The insurance company then shares part of what they are making with us. So we never charge you a fee.
Should you make a time commitment of eight, 10 or 12 years? It depends on your own individual situation. If you’re going to need the money a year from now, then obviously no. However, if you’re not going to use the money, or if you’re not going to use more than 10% per year, many people like to go a little bit longer. A longer time period is often accompanied with a bonus the very first day. If you choose an 8-year account right now, you can get a 5% bonus. If you opt for 14, 15, or 16 years, some of those are paying 10% bonuses right now. So if you’re not going to use the money, a longer time commitment may not be a bad idea. Let’s say you put in $100,000, and you get a 10% bonus the first day. Now your account value is $110,000. If you die six months later, your beneficiary gets $110,000 paid to him or her in a lump sum with no waiting. That 16 years is for you while you’re living—not for your beneficiary once you’re gone. Your beneficiary can get the money and do anything he or she wants to with it without penalty. It is not a life insurance policy, but it is kind of like having one if you die prematurely.
Many people ask me that question. When can I get my money out? How long do I have to wait to get my money out? The truth is, you are in control. You choose the number of years that you want, whether you choose five years, or seven years, or 10, or 15—whatever you choose, that’s up to you. After one year, you can take out 10% per year, every year, for any reason, with no penalty at all from the insurance company. Let’s say you chose an eight year account. After those eight years are complete, you can take all of your money out with no penalty whatsoever. To review, you can take out 10% per year after the first year without penalty. Then, when the time commitment is complete, you can take all of your money with no penalty whatsoever from the insurance company.
Moving your money from your current IRA to a fixed index annuity that is an IRA is easy, and you can do it without taxation. At Ty J. Young Inc., what we’ll do for you is set your annuity up as an IRA. Then, we can transfer your current IRA into your index annuity that is an IRA. We can do it without taxation and with no fees on our end. You could also roll a 401(k) over to your index annuity that is an IRA: again, without taxation. So absolutely you can.
Possibly. It depends on the crediting method. The stock market historically has averaged about 10% over the past 100 years (not counting fees or inflation). A good index annuity is going to average, historically, about 6 to 8%. You are not going to get all the gains of the market, but you are not going to get any of the losses. With a good index annuity, you don’t have to go up as much when the market goes up if you never go backwards when the market goes down. Your rate of return is going to be roughly, (again, historically speaking) 6-8%, depending on your anniversary date.
The crediting method is the method by which the interest is credited to your account. You make interest based upon what a stock market index does—such as the S&P 500. So the crediting method would determine what percentage of the S&P 500 gains for the year you actually receive. Again, the crediting method is the method by which your interest is credited to your account.
There are three ways to have your money completely protected against losses. The first is FDIC insurance. In a one-year CD right now, the rate of return is going be about 1%, which is not acceptable to most people. The second way is treasury bonds. If you buy a 10-year treasury right now, you will get about a 2% rate of return. The third way to have your money completely protected against losses is with a guaranteed insurance contract. The best guaranteed insurance contracts historically average about a 6 to 8% rate of return. A good guaranteed insurance contract allows you to go up with the market, lock in your gains, and when the market goes down, you don’t lose anything. You do receive compound interest, and there are no fees.
The reason people decide to put an annuity inside an IRA account is simple… the benefits it affords you. You choose the investment for your IRA based on the benefits it provides you. You can put any investments you want inside an IRA. For an index annuity, the benefits you receive are tailored towards your IRA: safety of principal and growth. That’s what most people want.
We have relationships with hundreds of different investments companies and insurance companies. When it comes to index annuities specifically, there are 39 companies that offer them to the general public: to you and to me. At Ty J. Young Inc., we know these companies inside and out. As a matter of fact, there are four or five that are the very best in the industry. We call them top tier companies. I know the companies, I know the products, and I have relationships with their management. Through our experience, we can direct you in the right path as we know where these insurance companies have struggled and where they have succeeded. That experience allows us to choose the very best products for our clients. That makes us unique.