Is Your Retirement Money Really Safe? RichLife Advisors Beau Henderson

Most people feel good about the security of their savings when they see the FDIC insured sign posted at the bank. But what’s the real story? Does the FDIC protect you against the erosion of inflation? Are there safer places to put your retirement money that have the same or better guarantees?

Are you going backward when it comes to your savings accounts?

Created in 1933 after some 9,000 banks went under during the Great Depression, the Federal Deposit Insurance Corporation (FDIC) is a U.S. corporation that insures your deposits in the event that your bank fails and goes out of business. Many retirees keep a good chunk of their retirement money savings in low-earning bank accounts or investments because they want their money to be safe, but the FDIC does nothing to protect you against inflation.

  • Current rates on average bank CDs are paying out 1 percent or less
  • The current rate of inflation is at 3 percent.

Imagine a sneaky little termite in the bank vault, eating away three out of every ten dollars. You won’t even notice the money is gone until you take those dollars out and they don’t go as far as they used to.

What can you do about it?

Educate yourself about your investment alternatives. There are better investments out there that offer the same kinds of guarantees while earning more competitive rates. For example, a short-term bond portfolio can give you higher yields than typical CD bank returns, and fixed rates annuities are earning between 2 and 3 percent. Insurance companies have a long history of security, and with the guarantees of the National Organization of Life and Health Guaranty Associations (NOLHGA), they can and DO offer protection much like the FDIC in the event of failure.

What is a Guaranty Association?

Guaranty associations cast a wide safety net for the benefit of anyone who owns a life insurance policy or product. Should the insurance company that holds your investment fail, the guaranty associations are there to help. During the recent recession, the FDIC closed 465 failed banks from 2008 to 2012. The National Guarantee Association reported 14 failed insurance companies during that same time period. What do the numbers 465 versus 14 tell you?

How does the Guaranty Association compare to FDIC guarantees?

  • The maximum benefit limit covered by the FDIC is up to$250,000 (in U.S. dollars) as long as the bank is a member firm.
  • The maximum benefit limits of state guaranty associations can vary from state to state, but the average in most states is $300,000.

The bottomline:

If you are relying on the banks to keep your money safe, then chances are you’re going backward when it comes to your retirement savings. Don’t miss out on competitive alternatives just because you are afraid or don’t know any better. Going backward, in my opinion, isn’t a wise investment, and highly increases the chance that you will outlive your money.


Can you improve the earning potential of your retirement portfolio without putting the safety of your principal at risk? Contact one of our qualified advisors at for a complimentary financial overview to get an unbiased answer to that question!




About Beau Henderson

Beau Henderson is a financial advisor, author, coach, radio personality, and CEO of RichLife Advisors. He has helped over 3,000 clients to not just improve their relationship with money, but to live the life of their dreams.

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