# The Blatt Watch by Peter Blatt: Investing Without Worry

From the desk of Peter Blatt

November 7, 2012

# One of the ideas that have been coming up with great frequency lately is the idea of basing your retirement income on math, and not on markets.

In other words, your retirement income should not rely on market performance but instead, it should simply be the result of mathematical calculations.  Sounds like a good idea, but how does it work in practice? To best illustrate, let's use an example.

Imagine a 55-year-old with \$250,000 in their Individual Retirement Account (IRA).  Their goal is to retire in 10 years (at age 65) and use that IRA to deliver retirement income.

• Question:  How much income can this person expect to receive when they retire in 10 years from their IRA?
• Answer:  No idea!  A big part depends on what return they get in their IRA over the next 10 years but that's completely unknown.

In the 1980's and 1990's, you could expect to earn a return of 10% per year or more.  In the 2000's, you earned a big fat 0% return.  So, what should our hypothetical investor expect for the next 10 years?  You can see the problem here.  It's a complete roll of the dice, which makes retirement planning next to impossible.

## What if you could predict with pinpoint accuracy today exactly what that IRA will produce in retirement income 10 years from now?

What if you could guarantee the equivalent of earning 10% - 12% per year over the next 10 years?  Would that be helpful?  Obviously, this would be a HUGE benefit to those saving for retirement.

But how is that possible?
There are products available that the average person simply is not aware of that would enable you to rely on guaranteed retirement income for the remainder of their lives.  You just need a trusted advisor, like Peter, guiding you to the product that makes the most sense for your individual situation.

The 55-year-old person in our example could deposit their \$250,000 into one of these products today and guarantee a lifetime retirement income of over \$29,000 per year in 10 years.  To duplicate this outcome in the market, you would have to earn 11.32% per year over the next 10 years.

What do you think the odds are that you can beat 11.32% over the next 10 years?  Pretty small, I'd guess.   And the best news is you can take advantage of these plans at any age.

Until next time,