The number one priority of retired investors today is financial security in their retirement years.  Yet, if there is one constant we can anticipate in the coming years, it is change.  The coming decades will bring challenging, frustrating, and dynamic changes to our financial lives.  This will be especially true of the way we position and reposition our money to keep it employed at its maximum to ensure that the golden years are truly golden.

If you are prepared to accept change, you will find that opportunities are greater today than ever before. Change can greatly enhance your retirement or destroy it. How you cope with change can determine whether you will succeed in accomplishing your retirement goals.

Accomplishing your investment and retirement goals is not a game; you cannot choose whether you will play or not. Since you have no choice but to play, it is vital that you learn to play very well.

To help us learn more about retiring successfully, we interviewed Mr. Ronald C. Krauss, President and CEO of U.S. Central Financial Group, Inc., of Grand Island, Nebraska. U.S. Central Financial Group currently provides insurance and retirement planning services in eight Midwestern states. Mr. Krauss was selected for this interview because of his extensive knowledge about the subjects of insurance, retirement and estate planning.

This interview covers a spectrum of topics affecting a successful retirement today. It contains tips and insights that can be of great value in helping one plan a more successful, fulfilling and financially rewarding retirement.

RETIREMENT STRATEGIES: Ron, your company, U.S. Central Financial Group, specializes in serving the financial needs of adults in their retirement years. Tell us what type of services your company offers retired persons.

KRAUSS: We offer a variety of insurance, annuities and planning services to benefit adults in their retirement years. People in their retirement years have different needs and objectives from younger people. As people enter their retirement years, their investment objectives usually change. Their emphasis moves from growth and value to income and preservation. Our job is to show our clients various financial strategies for optimizing their current financial resources.

For example, if a client needs more income, we offer annuities and split annuities, which when properly structured can be an effective way of increasing a retiree's income.

RETIREMENT STRATEGIES: What is a split annuity?

KRAUSS: A split annuity is a single block of money split between an immediate annuity and a deferred annuity. The immediate annuity provides a guaranteed monthly income that is tax advantaged, thus reducing income taxes and increasing income. The deferred annuity grows at a competitive rate on a tax-deferred basis to recover the principal.

In addition to the tax advantages of a split annuity, there are a host of other benefits such as safety, peace of mind, income guarantees, and avoidance of probate.  Annuities are guaranteed by the financial strength of the issuing insurance company, not by any bank or the FDIC.

RETIREMENT STRATEGIES: Ron, in your opening statement you talk about change and its significance toward retirement planning. What significant change have you seen that is impacting retirement planning today?

KRAUSS: Probably one of the biggest changes has been the introduction of the Fixed Indexed Annuity, somtimes referred to as an Equity Indexed Annuity. This is a financial product that can be ideal for many retirees. Indexed annuities combine upside earning potential with the safety and security of principal that is desired by so many retirees. The principal is guaranteed to the annuity owner by the insurance company. The risk is limited to what interest rate will be paid on the principal. The interest rate paid can vary and is traditionally linked to the performance of a stock market index such as the S&P 500 index, the Dow, or the Nasdaq. If the index that the annuity is linked to does well that particular year or reset period, the interest credited can be considerably better than more traditional savings vehicles. And, if the index that the annuity is linked to performs badly or goes down, the downside risk is limited to loss of interest without the worry of loosing principal. Surrender charges may apply for early withdrawal.

In addition, fixed indexed annuities are tax-deferred (a benefit on non-qualified funds) and they can avoid the costs and delays of probate. So, when you look at the total package of benefits they offer, it's easy to see why they have become so popular with retirees.

RETIREMENT STRATEGIES: What are some of the other services that your company can provide?

Actually, we offer quite a few other services. For example, when clients feel they are paying to much income tax each year, we show them strategies that can reduce their taxes. For clients who have an IRA or other qualified plans, we can show them distribution strategies that can potentially reduce income taxes, increase annual income, and increase the amount their children will receive in the event of death. If clients want to sell a business or some real estate, we can show them a simple strategy that can effectively double the proceeds from the sale of that asset. We can show clients how to protect the value of their investement portfolio, or how to recapture the value of a financial loss.

In dealing with large estates with potential estate tax liabilities, we can help to greatly reduce or eliminate the cost of federal estate taxes. We also offer some very unique financial planning solutions for long-term care. We have developed many innovative financial strategies that are designed to enhance our clients' retirement years and help secure a better life for themselves and for their loved ones.

RETIREMENT STRATEGIES: What is the biggest mistake that most retired adults make while managing their financial resources?

KRAUSS: We find that most retired people have not really taken the time to position or reposition their money to best accomplish their objectives. For example, most of our clients tell us that their primary objective is financial security and income assurance for themselves. That being their objective, we find that most would do a better job of accomplishing that objective if they would reposition some of their money into a combination of immediate and deferred annuities that are time staggered to minimize tax and maximize income while providing a guaranteed income for the rest of their lives.

RETIREMENT STRATEGIES: You said financial security is usually the primary objective of retired adults. What is the most common second objective, and what can you recommend for accomplishing that goal?

KRAUSS: A secondary goal of most retired clients is preserving their estate to help secure a better future for their children. In addressing that objective, there are some new life insurance plans for older adults that work very well. These plans are called Modified Endowments. They are normally established with one lump sum payment. If a retired individual or couple has money that they are keeping for emergencies, and if they are currently not spending the interest on that money for living expenses, and if that money will eventually go to their children, they should consider a Modified Endowment. It could be a very smart move. A properly structured Modified Endowment can provide many valuable benefits and tax advantages for both retired individuals and their families.

For the retired individual or couple, it can serve as an emergency fund that is accessible. It can reduce their income taxes every year for the rest of their lives. Their money accumulates tax deferred. They pay income taxes on the growth only if and when they make a withdrawal. If they do not need to access the money themselves for an emergency, it will pass to their beneficiaries tax free as a life insurance death benefit. Their money earns a competitive rate of interest and is safe with no stock market risk. It also avoids probate, and with proper planning it can avoid federal estate taxes.

As for benefits to their children or beneficiaries, a last-to-die Modified Endowment can increase the amount of money they will receive by as much as three to ten times depending on the retired person's age and health. Think of it this way, the $100,000 that was earmarked to go to the children can be increased to $300,000 or to $700,000 by simply purchasing the right type of life insurance. And the money the children will receive will be tax-free. These new policies are the most efficient way to maximize what the next generation will receive.

RETIREMENT STRATEGIES: When it comes to Life Insurance do you have any words of advice for people with existing policies or people considering purchasing new life insurance contracts?

Yes, in recent years we have seen the emergence of a free market for life insurance policies called a life settlement. For many years, policyowners had only one buyer for their policies - the insurer. The insurance company that issued the policy would buy the policy back for the cash surrender value.

Policyowners were facing a market situation in which a seller could sell to only one buyer. Imagine if a homeowner, after living in the home for many years was told that instead of being permitted to sell the home to any willing buyer, he or she could only sell it back to the original builder at the price determined by the builder.

Clearly, no one would tolerate such a situation for homeowners, but it has existed for life insurance policies for many years. The advent of a secondary market has created a free market for policyowners to value their insurance.

This new free market value put on life insurance contracts allows us more options when it comes to life insurance. For instance, it may be possible to gain more death benefits for the same amount of dollars currently invested in life insurance. Whether a client wants cash now or a death benefit for heirs, I would strongly encourage every policyowner to talk with someone licensed in both life insurance and life settlements. A simple review could yield big benefits.

RETIREMENT STRATEGIES: Earlier, you mentioned that your company offers some very unique retirement planning solutions for long-term care. Please explain.

KRAUSS: We find that most retired people think their choices regarding long-term care are either (1) buy traditional long-term care insurance to protect themselves or (2) don't purchase it, and take their chances. Many feel the cost of long-term care insurance is too high or they just can't afford it. And, many don't like the idea of annual premiums that can increase.

There is another alternative to consider that appeals to many. It is called a linked-benefit plan. It combines life insurance and long-term care protection into a single plan. A linked-benefit plan can greatly increase the amount of funds available for long-term care. Here's a hypothetical example of how it can work: I will use a $100,000 premium for ease of understanding the leverage potential. Lower premiums are available.

Let's say, Nancy, a 65 year old non-smoker, pays a one-time premium of $100,000.

If Nancy needs long-term care, Nancy will get up to $83,000 every year ($6,900 per month) for six years to reimburse qualified long-term care costs. That's nearly $500,000 or five times her original premium.

If Nancy doesn't need long-term care, her beneficiaries will receive a $166,000 tax free death benefit. If Nancy uses some of her death benefit for long-term care, the remaining portion will pass income tax free to her beneficiaries.

If Nancy changes her mind or needs her money, at anytime Nancy can request in writing, the return of her $100,000 single premium payment. It will be returned, no questions asked and no surrender charges. (Of course, benefits paid to Nancy or earlier withdrawals would be deducted).

Now Nancy is prepared for three possibilities, all of which are guaranteed and backed by the insurance company issuing the policy.

These linked-benefit life and long-term care plans are a great way to leverage assets and they are becoming increasingly more popular as more people are becoming aware of them. That's the general idea of how linked-benefit plans work. Benefits, of course, vary with age, health and issuing insurance company.

RETIREMENT STRATEGIES: I can see now that there are numerous ways your company can help in planning a better retirement. Does your company help implement the plan?

KRAUSS: Yes, we do help clients in all areas of implementation. We are licensed to broker all the financial products utilized in the financial strategies we recommend. One important benefit of obtaining these various financial products through our agency is that we are not tied to any one source or company. We are independent. We have the ability to select between those insurance and annuity products that are the most competitive and best suited for our client's needs. In addition, we constantly monitor each client's plan once it has been in place to ensure it is up-to-date and still meeting the client's objectives.

RETIREMENT STRATEGIES: In closing, from your 25 years of experience, is there anything you'd like to share with us, any final thoughts?

KRAUSS: Yes, there is. I'd like to review some very important points about our service.

First, today's retired adults played an important role in this country's growth and prosperity, and they deserve and need the best advice they can get. U.S. Central Financial Group is dedicated and committed to providing the highest quality and standards of insurance, annuities and planning services. Each of our associates are highly trained, so we know they are qualified to provide the standards of excellence to which U.S. Central Financial Group is committed.

Second, our investment philosophy is very conservative, and it is designed to protect your assets in any kind of economy.

Third, we present educational seminars and workshops in order to teach the principles and concepts of good money management.

Fourth, our services are not only for the wealthy. We have many middle- and upper-middle income clients.

Finally, we provide a free initial consultation so you can learn exactly what we can do for you, without obligation.

Ronald C. Krauss is President and CEO of U.S. Central Financial Group, Inc., of Grand Island, Nebraska. For more information, or to schedule an appointment, you can contact Mr. Krauss at 321 West 2nd Street, Grand Island, NE 68801; phone: (308) 382-2410, Toll Free: (800) 759-2453.