What is my level of RISK versus Reward? The Rule of 100 is a financial planning rule that recommends using a person’s age as the determining factor in determining risk. I personally agree. Utilizing this rule, a person 65 should have 65% of their investments in guaranteed, safe accounts, without fear of losses and 35% in the market. Example: In 2008, when the market crashed and investors lost 50% of their investments, it drastically was life changing. If a person followed the Rule of 100, then their loss was limited to 17.5%. In an Equity Indexed annuity a person would not have lost any money but would not have made any money. Market goes down you make 0. Market goes up, you make money, and that which is put into your account can not be lost due to market fluctuations.
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