Smart Is The New Rich is the indispensable retirement guide to winning financially in the "New Normal." All-time low interest rates mixed with all-time high stock markets have put retired investors and those near retirement into the cross hairs of history. Experts agree: The markets can rise, but something has to give at some point. Where will you be when the music stops? In retirement, there are no "do overs." Smart Is The New Rich reveals your risks, considers the alternatives, and helps zero in on practical solutions.
Published by: IQ Wealth Press
Date published: 03/29/2013
Edition: 1st
ISBN: 098905389X
Available in Paperback
IQ Wealth Management
Financial Advisor
Steve Jurich, Retirement Coach, Wealth Manager, and Founder of IQ Wealth Management, speaks more like a favorite professor than an insurance agent, or even a retirement adviser. Unlike the breed of annuity agents who use pressure tactics and tired lures like “free steak dinners” to gain captive audiences, Jurich’s priority is creating more informed consumers. He takes time to make sure his clients understand the range of options available to retirees so they become better educated investors on the whole. That investment of time is a significant one for Jurich (pronounced “Jur-itch”), but he believes the results his clients see in their portfolios speak for themselves. It’s been said that “knowledge is power,” and when that knowledge is applied wisely, Jurich believes it can lead to a desirable destination: lasting wealth. Besides his role as a Wealth Manager (www.IQWealthGroup.com), Jurich is a leading expert on Hybrid Index Annuities and Index Universal Life Insurance (www.MyIndexLifeGuy.com) . He is the Editor-in-Chief of MyAnnuityGuy.com, and host of the popular radio show, Journey to Wealth, on Money Radio. His company, LYON Pension Group, specializes in defined benefits and profit sharing plans for business.
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MyAnnuityGuy.com is a privately owned website published by IQ Wealth Management, an accredited member of the Better Business Burueau with an A + rating. Owner and founder Steve Jurich is a Certified Income Specialist™ who has been counseling retirees since 1994.
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A History of Annuities

Despite my own passion for annuities, I recognize that this vital financial planning tool offers little excitement for the average person. It comes as no surprise that history courses rarely (ever?) include units on the history of annuities. This is a shame, because this history dates all the way back to the Roman Empire, when buyers and sellers entered into contracts called “annua.”

The Beginning

Early Roman Empire

Like many Latin words, annua is the obvious predecessor of an English word: annual. As with today’s annuities, annua involved a buyer paying a lump sum to a seller who would later make annual payments to the buyer each year until the buyer passed. Financial tools such as the actuarial life table also came into existence during this time, around 222 A.D.

As is often the case, necessity was the mother of this invention. Sellers were unable to predict the lifespan of buyers, which is necessary knowledge to create the terms of the annua contracts. The goal was to make enough of a profit on the annua whose buyers passed before the full payout and therefore cover the losses experienced on those whose lives surpassed the original contract.

Another beneficiary of annua was the typical Roman soldier who received military service compensation in the form of annual stipends. Governments and militaries would repeat this practice many times throughout the coming centuries.

Europe in the Middle Ages

knight-wearing-armor

In the Middle Ages, Europeans found a new use for annuities: funding war coffers. Just as today, war isn’t cheap. Kings and feudal lords sought investors as financial backers for their conflicts, placing these contributions into a tontine. Investors received payments from the pool. As investors died, the remaining investors split their shares, continuing until only one investor remained and received all remaining monies in the tontine.

Europeans continued using annuities in later years, expanding the concept to something that more closely resembled the annuities of today, as a kind of savings account offering a guaranteed income.

One interesting note here: those issuers offering annuities to royalty soon realized their titled patrons lived much longer lives than the public did. Pricing adjustments quickly followed.

Across the Pond

In 1759, Pennsylvania pastors became the first known Americans to receive annuities, funded by donations from their congregants and church leaders. Today’s widows and orphans’ funds have an origin in these types of annuities.

Benjamin-Franklin

Benjamin Franklin provides an excellent example of the potential longevity of an annuity. In his will, Franklin left annuities to two cities: Boston and Philadelphia. For over 200 years, all the way through to the early 1990s, Franklin’s annuity to Boston continued paying and only stopped when the city opted to receive the remaining balance in a lump-sum distribution. Even so, Americans in the late 18th century mostly rejected the idea of annuities, preferring to rely on the generosity of family in their golden years. The main proponents of annuities at this time became attorneys and estate planners, who saw the value of an annuity in fulfilling the final wishes of clients.

The next big step America made toward annuities came in 1812. It once again featured Pennsylvania; specifically, a life insurance company began offering annuity contracts. Nearly half a century later, Union soldiers had the choice of receiving compensation in the form of an annuity.

The 20th Century

The early 1900s gave the American public its first shot at annuities, when the Pennsylvania Company for Insurance on Lives began offering them in 1912. Growth remained slow but steady until the Great Depression. In the late 1930s, investors placed more trust in insurance companies than in banks. FDR’s New Deal also placed great emphasis on savings, and the public responded. Even corporations got involved, developing group annuities for pension plans.

These early public annuity offerings offered fixed rates, tax-deferred status, and a guaranteed return. Clients had two options for payment: fixed income for life or payments throughout a given number of years.

Variable annuities arrived in 1952, allowing owners to choose their account type. In the late 1980s, indexed annuities offered even more diversity. Congress even encouraged annuities with 1982’s Periodic Payment Settlement Act, which exempted structured settlement payments from taxes. Through the remaining years of the 20th century, annuities kept growing in complexity.

Annuities Today

Annuities continue evolving today, with a wide variety of available products and new features such as principal guarantees and long-term care benefits. Some of these innovations came about in response to annuity critics. Investors responded, too, with annuity sales doubling over the amount recorded in 1995.

Part of the reason behind this increased popularity belongs to the expansion of entities offering annuities. In addition to the original insurance agents, banks and brokerage houses joined the field. Even with all of the changes, though, today’s annuities are easy to recognize as the descendants of those from 1,800 years ago.

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What people are saying about SMART IS THE NEW RICH,

an Amazon Best Seller in 3 categories
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Must read

I'm a Certified Financial Adviser and if I didn't run my own company I would join this guys'. Seriously, it's a must read in today's new financial reality in fact….I'm handing these books out to many of my clients for free, it's THAT important! Thanks Steve, I hope to meet you in person one of these days.
Yuerg E.

Yuerg Eichmann March 17, 2016

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Must read for retirement planning

"Smart Is The New Rich" is a great overview of the many facets of retirement planning. It has changed my thinking about how much capital I have versus how much income I will have in retirement. The book provides easy to understand, side by side comparisons of risks and growth of hypothetical investments in Hybrid Fixed Indexed Annuities and the securities market. A good read and great reference for retirement planning for all age groups!

William Thomas March 17, 2016

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Straight talk about retirement strategies

The SMART thing to do is buy this book, read it, tell your friends, and keep it handy for future reference. It is an easy read, interesting, clearly written, and full of valuable information. "Smart is the New Rich" gives a practical, no-nonsense approach to the "de-accumulation phase" of investing, and is helping me sort out my retirement plan. Of particular interest is the clarification of the strengths and weaknesses of the various types of annuities. Although the charts and graphs are a bit small in the book, the Kindle version allows expansion of the text and therefore easy to read. If you are nearing retirement, and seeking a reliable and sustainable income for a lifetime, I highly recommend you read this book!!!

Carol March 17, 2016