Written by: Ford Stokes, RSSA, MBA

Prepared for ActiveWealth.com and RetirementResults.com

Election results can change the balance of power in Washington overnight. Your retirement plan, however, may need to support you and your family for decades. That difference in time horizons is one reason investors should be careful about making permanent financial decisions in response to a temporary surge of political emotion.

Author commentary and retirement planning guidance. Supporting background: www.investor.gov — https://www.investor.gov/additional-resources/general-resources/publications-research/info-sheets/beginners-guide-asset

When the sitting president’s party loses congressional power, investors often worry about taxes, spending, regulation, and the direction of the economy. Those issues deserve attention. But selling a retirement portfolio because an election feels unsettling creates another problem: deciding when to buy back in. A portfolio can miss a meaningful recovery while its owner waits for the news to become comfortable.

The better objective is to stay invested in a way you can sustain. That means maintaining suitable growth exposure, preparing for withdrawals, examining expenses, managing risk, and coordinating investment decisions with a thoughtful tax strategy. It can also mean evaluating an insurance contract for a portion of the money that serves a conservative role in your retirement plan.

For readers of Active Wealth Management and Retirement Results, the central message is practical: inspect what you expect. Understand what you own, what you pay, how your plan responds to stress, and which benefits are guaranteed. Historical election patterns can provide perspective, but the quality of your retirement plan matters more than any political prediction.

What history actually says about losing both chambers

Before examining performance, define the political event precisely. Losing seats in the House and Senate is different from losing control of both chambers. It is also different from an election that leaves the opposition controlling both chambers when it already controlled one beforehand.

Author analysis and planning guidance. Supporting background: history.house.gov — https://history.house.gov/Institution/Presidents-Coinciding/Party-Government/

Within the postwar record, the president’s party lost control of both chambers in the same midterm election in 1946, 1954, 1994, and 2006. The Nasdaq-100 did not exist for the first two events, and the modern S&P 500 launched in 1957. A directly comparable study of the two named indexes therefore has only two qualifying elections: 1994 and 2006. Congressional party records establish the political classifications. [1]

Sources: history.house.gov — https://history.house.gov/Institution/Presidents-Coinciding/Party-Government/
www.spglobal.com — https://www.spglobal.com/spdji/en/research-insights/index-literacy/the-sp-500-and-the-dow/
www.nasdaq.com — https://www.nasdaq.com/newsroom/celebrating-40-year-rise-nasdaq-100-index

In 1994, President Bill Clinton’s Democratic Party lost the House and Senate to Republicans. In 2006, President George W. Bush’s Republican Party lost both chambers to Democrats, with Senate control reflecting the independents who caucused with Democrats. These examples involve presidents from opposite parties, which makes them useful for separating investment discipline from partisan preference.

Sources: history.house.gov — https://history.house.gov/Institution/Presidents-Coinciding/Party-Government/

This distinction also explains why 2014 should not be described as a simultaneous loss of both chambers. President Barack Obama’s party lost Senate control that year, but Republicans already controlled the House. Investors can study that outcome separately, but adding it to a two-chamber-flip sample would change the question being answered.

Sources: history.house.gov — https://history.house.gov/Institution/Presidents-Coinciding/Party-Government/

How the S&P 500 and Nasdaq 100 performed over nine months

For consistency, the following calculations measure price changes from the close on Election Day to the close on the same calendar date nine months later. All four dates were trading days. The figures exclude dividends, investment fees, taxes, and the costs of implementing an investment strategy. They are cumulative nine-month returns, not annualized returns. [2–3]

Source: www.econstats.com — https://www.econstats.com/eqty/eq_d_mi_2.htm
fred.stlouisfed.org — https://fred.stlouisfed.org/data/NASDAQ100

Election and president	Nine month window	S&P 500	Nasdaq 100
1994 Bill Clinton	Nov 8 1994 to Aug 8 1995	+20.35%	+38.84%
2006 George W Bush	Nov 7 2006 to Aug 7 2007	+6.79%	+12.64%

The calculation is straightforward: divide the ending index level by the starting level, subtract one, and multiply by 100. For example, the S&P 500 rose from 465.65 on November 8, 1994, to 560.39 on August 8, 1995. That produces a price gain of approximately 20.35%. The Nasdaq-100 rose from 407.44 to 565.71 over the same dates, producing approximately 38.84%.

Sources: www.econstats.com — https://www.econstats.com/eqty/eq_d_mi_2.htm
fred.stlouisfed.org — https://fred.stlouisfed.org/data/NASDAQ100

Following the November 7, 2006 election, the S&P 500 increased from 1,382.84 to 1,476.71 by August 7, 2007, a gain of approximately 6.79%. The Nasdaq-100 increased from 1,741.53 to 1,961.64, a gain of approximately 12.64%. [2–3]

Source: www.econstats.com — https://www.econstats.com/eqty/eq_d_mi_2.htm
fred.stlouisfed.org — https://fred.stlouisfed.org/data/NASDAQ100

Both indexes finished these particular windows higher. That historical observation challenges the assumption that a president losing congressional control necessarily makes the following months unfavorable for stocks. However, two observations cannot establish a dependable trading rule, a probability of success, or proof that the election caused the returns.

Author analysis and planning guidance. Supporting background: www.econstats.com — https://www.econstats.com/eqty/eq_d_mi_2.htm
fred.stlouisfed.org — https://fred.stlouisfed.org/data/NASDAQ100

The endpoint also matters. The gains through August 2007 did not prevent the severe market losses associated with the financial crisis that followed. A nine-month snapshot describes one period; it does not establish that the investment environment was safe or that holding an aggressive portfolio indefinitely would have suited every retiree.

Author analysis and planning guidance. Supporting background: www.econstats.com — https://www.econstats.com/eqty/eq_d_mi_2.htm
fred.stlouisfed.org — https://fred.stlouisfed.org/data/NASDAQ100

Broader midterm research offers additional context. Schwab’s research, using price returns since 1974, reports an average S&P 500 gain of 12.4% in the six months following midterms, with positive returns in all 13 observations through the 2022 election. That is a different sample and a different holding period from the nine-month study above. It supports historical perspective without supplying a forecast. [4]

Source: www.schwab.com — https://www.schwab.com/learn/story/what-2026-midterms-could-mean-markets

Stay invested with a plan you can actually follow

An election is a reason to review assumptions, especially when proposed policy could affect your taxes or business interests. It is rarely a sufficient reason, by itself, to abandon a diversified retirement strategy. Corporate earnings, valuations, inflation, interest rates, and economic conditions continue to influence prices regardless of which party controls Congress.

The practical challenge is that investors experience markets in real time. A long-term plan may look reasonable on paper yet become difficult to follow during a sharp decline. If your stock allocation makes you feel compelled to sell whenever political headlines become intense, the allocation may need attention before the next stressful event.

Start by identifying the money you expect to spend soon and the money intended for later retirement years. Near-term spending needs should not depend entirely on selling stocks at favorable prices. Maintaining suitable liquid reserves can give the growth portion of your portfolio time to work through difficult markets.

Staying invested also does not require maintaining exactly the same holdings forever. Rebalancing, replacing an expensive fund, reducing a concentrated position, or adjusting for a changed retirement date can all be consistent with disciplined investing. The key is to connect each change to a documented financial purpose rather than a reaction to the latest headline.

Strategic asset allocation establishes the foundation

Strategic asset allocation is the long-term distribution of a portfolio among asset categories based on an investor’s objectives, time horizon, financial resources, and ability to tolerate losses. It establishes the portfolio’s intended structure and the rules for bringing that structure back into balance.

Sources: www.investor.gov — https://www.investor.gov/additional-resources/general-resources/publications-research/info-sheets/beginners-guide-asset
www.cfainstitute.org — https://www.cfainstitute.org/sites/default/files/-/media/documents/book/rf-publication/2013/rf-v2013-n4-1-pdf.pdf

The 60% stock and ETF allocation and 40% FIA allocation described below is one strategic framework for suitable households. Another household might need more growth, greater liquidity, a different amount of contractual protection, or a conventional bond allocation. The appropriate structure depends on the full retirement plan.

Suppose market gains push the stock allocation substantially above its target. Rebalancing can restore the planned exposure by directing new contributions toward other assets or trimming stocks. The purpose is to maintain the risk profile the household selected, while considering transaction costs and taxes. SEC investor education describes this relationship among allocation, diversification, and rebalancing. [5]

Source: www.investor.gov — https://www.investor.gov/additional-resources/general-resources/publications-research/info-sheets/beginners-guide-asset

The strategic plan should also recognize assets outside the managed brokerage account. Social Security, pensions, real estate, business ownership, cash reserves, and annuities can affect how much investment risk the household can reasonably bear. A portfolio percentage is useful only when it fits the broader retirement picture.

Tactical asset allocation allows defined adjustments

Tactical asset allocation involves shorter-term deviations from long-term targets based on a stated investment process. An adviser might adjust exposures in response to valuation measures, economic conditions, market trends, or risk indicators, subject to agreed limits.

Sources: www.cfainstitute.org — https://www.cfainstitute.org/sites/default/files/-/media/documents/book/rf-publication/2013/rf-v2013-n4-1-pdf.pdf

For example, a strategy with a 60% long-term stock target might permit stock exposure between 50% and 65%, provided the liquid assets and contract restrictions allow it. Those boundaries make the decision process reviewable. Investors can ask what triggers a change, how much discretion the manager has, and what would cause the portfolio to return to its long-term target.

Author analysis and planning guidance. Supporting background: www.cfainstitute.org — https://www.cfainstitute.org/sites/default/files/-/media/documents/book/rf-publication/2013/rf-v2013-n4-1-pdf.pdf

A fiduciary adviser using both approaches should explain how they work together. Strategic allocation provides the long-term structure; tactical decisions operate within an explicit risk budget. The tactical process should have a benchmark, a review schedule, and performance reporting after relevant costs.

Tactical management can disappoint. Reducing stocks before a rally or buying defensively positioned assets at the wrong time can hurt results. More trading can also increase taxes or expenses. The existence of a tactical process does not establish that it will outperform a disciplined strategic portfolio. Investors should evaluate evidence, consistency, and suitability before paying more for it.

The traditional 60 40 portfolio and its intellectual roots

The traditional 60/40 portfolio allocates 60% to stocks for growth and 40% to bonds for income and diversification. Its intellectual roots are closely associated with Harry Markowitz’s March 1952 paper, Portfolio Selection, which established the foundation of modern portfolio theory. Markowitz showed why investors should evaluate assets together, considering expected returns, volatility, and how their returns move in relation to one another. However, his work did not prescribe a universal 60% stock and 40% bond allocation for every investor; the familiar 60/40 mix is a practical convention associated with that broader diversification framework. The enduring lesson is to choose a portfolio for its combined risks and expected benefits, then revisit the allocation as the household’s needs and available alternatives change. [20–21]

Source: doi.org — https://doi.org/10.1111/j.1540-6261.1952.tb01525.x
www.nobelprize.org — https://www.nobelprize.org/prizes/economic-sciences/1990/press-release/

A new 60 40 framework for growth and contractual protection

For suitable retirement households, we recommend considering a different version of the traditional 60/40 portfolio: allocate 60% to diversified stocks and low-cost stock ETFs, and 40% to carefully selected fixed indexed annuities with no annual base contract fee and no income rider. The purpose is to retain growth potential while giving the conservative allocation contractual protection against financial market losses. This framework requires adequate liquid reserves outside the annuity and a willingness to accept its access restrictions.

Author analysis and planning guidance. Supporting background: www.investor.gov — https://www.investor.gov/additional-resources/general-resources/publications-research/info-sheets/beginners-guide-asset
www.investor.gov — https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/mutual-fund-and-etf-fees-and-expenses-investor-bulletin

Here is an illustrative starting allocation. The percentages refer to original dollars committed, before any annuity bonus, and are not a personalized recommendation. An ETF-only equity sleeve can keep implementation simple; individual stocks can substitute within that sleeve when appropriate without increasing the overall 60% equity target.

Allocation	Share of portfolio	Role
Broad US stock index ETF sleeve	40%	Domestic equity growth
Broad international stock index ETF sleeve	20%	Geographic equity diversification
FIA with no ongoing contract or strategy fee and no income rider	40%	Contractual protection against market losses and planned withdrawals

The stock allocation can use broad, diversified index ETFs rather than expensive actively managed funds. For any individual stock holdings, establish position limits and consider overlap with the ETFs. An individual stock has no fund expense ratio, but concentration, trading costs, and potential advisory fees still matter. A zero fund expense ratio is not a reason to concentrate a retirement account in a handful of companies.

Our preference in this framework is to avoid mutual fund share classes carrying sales loads or ongoing 12b-1 distribution fees and to use low-cost ETFs. Some mutual funds do not charge 12b-1 fees and can be inexpensive, so the criticism should focus on actual costs rather than suggest that every mutual fund carries that charge. Compare prospectus fee tables, advisory charges, trading spreads, and tax consequences before replacing an existing holding. [17]

Source: www.investor.gov — https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/mutual-fund-and-etf-fees-and-expenses-investor-bulletin

The 40% annuity allocation serves a different purpose from the equity sleeve. Select an FIA whose base contract and chosen crediting options have no explicit ongoing fee, and omit a paid income rider when its additional guarantee is not needed. Verify the absence of strategy charges and other recurring deductions. “No financial market loss” describes the protection of account value against negative index performance; it does not mean the contract has no insurer, inflation, liquidity, or opportunity risk.

Sources: www.investor.gov — https://www.investor.gov/introduction-investing/investing-basics/investment-products/annuities

Reduce advisory billing on the portion placed in the annuity

Under the arrangement we describe here, the FIA is excluded from assets subject to our recurring investment advisory fee. Moving 40% of the portfolio into that FIA therefore removes that allocation from recurring advisory billing. It does not delete 40% of the portfolio: the money remains part of the household’s retirement assets.

Source: Firm-provided description of compensation and service; not independently verified against a public website. General disclosure background: www.investor.gov — https://www.investor.gov/introduction-investing/getting-started/working-investment-professional/investment-advisers
www.investor.gov — https://www.investor.gov/CRS

For a $1 million portfolio, assume an unchanged 1% annual advisory rate. Charging that rate on the full portfolio would cost $10,000 annually. Charging it only on the $600,000 stock and ETF sleeve would cost $6,000. That is a $4,000 reduction, or 40% of the illustrated advisory fee. It is not a 40% reduction in every expense, and different fee schedules or account values will change the result.

Source: Author calculations using the assumptions stated above. Expense and fee background: www.investor.gov — https://www.investor.gov/introduction-investing/investing-basics/glossary/expense-ratio

The ETF expense ratio should be reported separately. For example, an assumed 0.05% weighted expense ratio on the $600,000 ETF sleeve would cost approximately $300 annually. Combined with the illustrative $6,000 advisory fee, those recurring charges would equal $6,300, or 0.63% of the original total portfolio. The 0.05% is an illustration, not a quoted expense ratio for a specific fund. This calculation excludes trading costs, taxes, and the annuity’s implicit economic costs.

We receive a one-time commission from the issuing insurer for the FIA placement described here, and we remain responsible for servicing the annuity throughout its life. That service includes helping with permitted withdrawals, beneficiary updates, contract questions, and coordination with the retirement income plan. The commission is compensation and creates a conflict that we disclose; payment by the insurer does not make the product economically costless.

Ask for the commission, any other compensation, the scope of ongoing service, and the exclusion from advisory billing in writing. A different adviser may charge on annuity assets or use another compensation structure. The fee reduction above depends on the actual agreement, not merely on purchasing an annuity.

Author analysis and planning guidance. Supporting background: www.investor.gov — https://www.investor.gov/introduction-investing/getting-started/working-investment-professional/investment-advisers
www.investor.gov — https://www.investor.gov/CRS

Build withdrawals without automatically buying an income rider

A retiree can arrange systematic withdrawals from an FIA without purchasing an optional income rider. For a household that values flexibility and already has adequate lifetime income from other sources, avoiding an unnecessary rider fee can be a useful way to retain more account value. Pay for an additional guarantee only when its protection addresses a real planning need.

Sources: www.investor.gov — https://www.investor.gov/introduction-investing/investing-basics/investment-products/annuities

The Omega Bonus provision discussed here permits 5% withdrawals from the eligible base beginning in year two, subject to contract terms. That percentage is greater than 4%, but the two figures answer different questions. The familiar 4% guideline generally refers to an initial withdrawal from a diversified portfolio followed by inflation-adjusted dollar withdrawals. A contract’s 5% allowance describes access without specified contract charges, not a sustainable inflation-adjusted lifetime spending promise.

Sources: itzxgomruwporrdqfrgv.supabase.co — https://itzxgomruwporrdqfrgv.supabase.co/storage/v1/object/public/brochures/by-hash/b4/b498a89902d47efec37640511810d6365310660a9e3e4a0b64938d5adc57ae83.pdf
www.schwab.com — https://www.schwab.com/learn/story/beyond-4-rule-how-much-can-you-spend-retirement

For example, a $400,000 eligible FIA base would permit a $20,000 withdrawal at 5%. That is 2% of a $1 million overall portfolio, not 5% of the whole portfolio. If the equity sleeve also supplied $20,000, total withdrawals would be $40,000, or 4% of the original total. Both sleeves must be evaluated together before claiming that the household can safely spend more.

Source: Author arithmetic illustration; not a carrier illustration or forecast. Contract background: itzxgomruwporrdqfrgv.supabase.co — https://itzxgomruwporrdqfrgv.supabase.co/storage/v1/object/public/brochures/by-hash/b4/b498a89902d47efec37640511810d6365310660a9e3e4a0b64938d5adc57ae83.pdf

Self-directed withdrawals generally reduce account value and can eventually deplete it. A suitable lifetime income rider may provide payments after account value is exhausted, subject to its terms; withdrawing without that protection does not recreate the same guarantee. Choosing to avoid a rider is therefore a decision to manage longevity and depletion risk through the rest of the plan.

Sources: www.investor.gov — https://www.investor.gov/introduction-investing/investing-basics/investment-products/annuities

Replace bond price exposure while understanding the remaining rate risk

Replacing the bond allocation with an FIA removes direct exposure to the daily market-price declines that bonds can experience when interest rates rise. Longer-duration bonds are generally more sensitive to rate changes. An FIA’s account value is not marked down simply because bond market prices fall. [18]

Source: www.investor.gov — https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/what-are

However, interest rates can still affect the annuity’s economics. A market value adjustment may affect amounts withdrawn beyond permitted limits during the surrender period. Changing rates can also influence future crediting terms and the attractiveness of other products. An FIA replaces a particular kind of bond price risk; it does not eliminate every consequence of changing interest rates. [19]

Source: www.investor.gov — https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/updated-investor-bulletin-indexed-annuities

This version of 60/40 also changes rebalancing. Because annuity assets may not be freely transferable, an adviser cannot assume the same trading flexibility as a conventional stock-and-bond portfolio. Use liquid reserves, permitted distributions, and equity-sleeve adjustments to manage the household allocation within the contract’s restrictions.

Author analysis and planning guidance. Supporting background: www.investor.gov — https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/what-are
www.investor.gov — https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/updated-investor-bulletin-indexed-annuities

The goal is to become more fee aware, more risk aware, and more tax aware. Understand the dollars you pay, the risks each allocation assumes, and the after-tax income it can reasonably support. A product without an annual contract fee can be powerful when it fits that plan, especially when it also removes assets from recurring advisory billing. Its value should be judged alongside its crediting limits, compensation, access terms, and role in the household’s long-term security.

Evaluate bond yields rather than a stock style earnings multiple

A forward price-to-earnings ratio divides a stock’s price by expected corporate earnings per share. A bond is a creditor’s contractual claim to interest and principal, so corporate bonds are ordinarily evaluated using yield to maturity, yield to worst, credit spreads, duration, and default risk. A company can have a stock P/E ratio and outstanding bonds, but the stock’s earnings multiple does not become the valuation ratio of its debt.

Author analysis and planning guidance. Supporting background: www.investor.gov — https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/what-are
fred.stlouisfed.org — https://fred.stlouisfed.org/series/BAMLC0A0CMEY

Some commentators create a bond “P/E equivalent” by dividing one by the yield expressed as a decimal. Under that shorthand, a 150-to-1 multiple corresponds to a yield of approximately 0.67%. This is a yield-inverse analogy, not a standard forward P/E measure, and it ignores the bond’s maturity, principal repayment, credit losses, and reinvestment assumptions. It cannot support a current market valuation claim without an identified benchmark, date, and methodology.

Source: Author explanation and calculation of the reciprocal of yield. Bond background: www.investor.gov — https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/what-are

For perspective, the ICE BofA US Corporate Index effective yield reported through FRED was 5.79% on November 2, 2026, the latest observation available on that series when checked for this update. Inverting that yield produces approximately 17.3 times, not more than 150 times. This is an illustrative calculation using a broad investment-grade benchmark, not a valuation of every corporate bond or a forecast of realized returns. The evidence reviewed does not substantiate a current US corporate-bond forward P/E above 150-to-1. [22]

Source: fred.stlouisfed.org — https://fred.stlouisfed.org/series/BAMLC0A0CMEY

Why now can be a useful time to evaluate a bond replacement

Now can be a sensible time to review the income portion of a retirement portfolio when bond-price volatility, recurring advisory fees, or the desire for contractual market-loss protection no longer fit the household’s priorities. The reason to consider a no-annual-fee FIA is the match between those needs and the contract’s benefits, rather than an unsupported claim that all corporate bonds are extremely overpriced.

Author analysis and planning guidance. Supporting background: www.investor.gov — https://www.investor.gov/introduction-investing/investing-basics/investment-products/annuities
www.investor.gov — https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/updated-investor-bulletin-indexed-annuities

For money that can remain committed through the surrender period, an appropriate FIA can protect account value from financial market losses, provide potential index-linked interest credits, and permit planned withdrawals under its terms. Selecting a contract without an annual base fee, strategy fee, or unwanted income rider can avoid those recurring deductions. Under the advisory arrangement described in this article, excluding the FIA allocation from assets billed for investment management also reduces recurring advisory charges. These benefits can make an FIA a useful alternative for part of the retirement income allocation.

Safety must be defined precisely. Replacing a bond fund with an FIA removes direct exposure to the fund’s daily market-price changes, but an early exit may involve surrender charges, bonus recapture, or an interest-rate-sensitive market value adjustment. The insurer’s claims-paying ability replaces direct ownership of the underlying bond portfolio as the source of contractual security. Insurers themselves commonly hold bonds, and an FIA does not eliminate credit risk from the financial system. Inflation, limited liquidity, and the opportunity cost of capped or otherwise restricted credits remain relevant. [19]

Source: www.investor.gov — https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/updated-investor-bulletin-indexed-annuities

Before making a replacement, compare the actual bond holdings and after-fee yield with the FIA’s guaranteed values, current crediting terms, surrender schedule, and withdrawal provisions. Selling bonds may realize a loss or trigger tax; retaining an individual bond to maturity can provide a different outcome from selling a bond fund today. A higher starting bond yield also deserves consideration. The prudent decision is a household-specific comparison, not a declaration that every bond should be replaced or that the current date makes an annuity risk-free.

Consider whether a fixed indexed annuity can serve a conservative role

Some households evaluate fixed indexed annuities as a replacement for part of their bond allocation. This can be appropriate to consider when the objective is contractual protection against market losses and the money can remain committed for a substantial period. The comparison should include bonds, Treasury securities, CDs, and other suitable alternatives.

A fixed indexed annuity is an insurance contract. Its interest credits are determined by contractual formulas linked to specified indexes; the owner does not directly own those indexes. A contractual floor can protect against negative index performance, while caps, participation rates, or other provisions limit credited gains. Withdrawals and charges can still reduce the account. [6]

This arrangement can support staying invested at the household level. A retiree who has an appropriate conservative reserve may feel more comfortable maintaining diversified stock exposure elsewhere. The annuity itself, however, should not be described as direct stock market participation or as a substitute for every benefit of owning bonds.

Liquidity is an especially important difference. A publicly traded bond fund generally offers access at its current market value. An annuity can impose surrender charges, a market value adjustment, and bonus recapture under applicable terms. An emergency fund, planned home purchase, or substantial near-term expense requires a different liquidity analysis.

Evaluating the AuguStar Omega Bonus and a proposed 27 percent bonus

AuguStar’s Omega Bonus is one product that may enter this discussion. A reported premium bonus of up to 27% is attractive enough to merit careful examination, but it must be verified against the current carrier rate sheet and the actual state-specific contract. The public secondary listing reports that the maximum varies with age and allocation conditions. The consumer brochure reviewed for this article contains older, lower bonus examples. [6–7]

Source: itzxgomruwporrdqfrgv.supabase.co — https://itzxgomruwporrdqfrgv.supabase.co/storage/v1/object/public/brochures/by-hash/b4/b498a89902d47efec37640511810d6365310660a9e3e4a0b64938d5adc57ae83.pdf
www.annuity-atlas.com — https://www.annuity-atlas.com/reviews/product/augustar-omega-bonus-10

If an eligible contract credits a 27% account-value bonus on a $100,000 premium, the initial illustrated value would be $127,000. That arithmetic does not make $27,000 immediately available for withdrawal. The bonus can have vesting conditions, and the amount available on surrender can differ from the displayed accumulation value.

Ask for three values in writing: accumulation value, cash surrender value, and death benefit. Also ask whether any quoted benefit is an income calculation base rather than money available as a lump sum. Those distinctions determine what the bonus actually contributes to your retirement plan.

Author analysis and planning guidance. Supporting background: itzxgomruwporrdqfrgv.supabase.co — https://itzxgomruwporrdqfrgv.supabase.co/storage/v1/object/public/brochures/by-hash/b4/b498a89902d47efec37640511810d6365310660a9e3e4a0b64938d5adc57ae83.pdf
www.annuity-atlas.com — https://www.annuity-atlas.com/reviews/product/augustar-omega-bonus-10
annuityeducator.com — https://annuityeducator.com/reviews/the-ohio-national-life-insurance-company/fixed-index/omega-bonus-10-variation-states

The Omega Bonus product listing identifies no annual contract fee. For the base contract without fee-bearing optional features or a separate advisory charge, account value is protected from financial market losses and is not reduced by an annual contract fee. A negative index period can produce a zero credit rather than a market loss. [6,16]

Source: itzxgomruwporrdqfrgv.supabase.co — https://itzxgomruwporrdqfrgv.supabase.co/storage/v1/object/public/brochures/by-hash/b4/b498a89902d47efec37640511810d6365310660a9e3e4a0b64938d5adc57ae83.pdf
annuityeducator.com — https://annuityeducator.com/reviews/the-ohio-national-life-insurance-company/fixed-index/omega-bonus-10-variation-states

That protection matters for retirement planning. An owner does not need to recover from an index-driven account loss before future credits can add value. However, “no annual contract fee” does not mean every transaction is free: withdrawals reduce value, and early access may trigger surrender charges, bonus recapture, or a market value adjustment. Restrictions on credited gains are also economic tradeoffs. Verify the selected contract and any optional features, and ask whether the adviser charges separately. [8]

Source: www.investor.gov — https://www.investor.gov/introduction-investing/investing-basics/investment-products/annuities

Understand the index strategy before expecting market like returns

An allocation among eight index options is not necessarily a single index containing eight investments. AuguStar’s resource center lists several distinct strategies, including the US Strategic Balanced Asset 8 Index and the Strategic Dynamic Balanced Asset 8 Index. Their descriptions reference volatility control targeting 8%; the number should not be interpreted as a promised 8% return. [9]

Source: augustarfinancial.com — https://augustarfinancial.com/professionals/annuity-index-resources/

Before relying on a “blended eight-index” illustration, obtain the exact index names, allocation percentages, crediting periods, and applicable participation rates or caps. Ask whether the proposal is an adviser-designed allocation across multiple options or a particular index with “8” in its name. The economic results can differ substantially.

Author analysis and planning guidance. Supporting background: augustarfinancial.com — https://augustarfinancial.com/professionals/annuity-index-resources/

A hypothetical index gain of 10% combined with a 60% participation rate would produce a 6% credit under a simple participation-only formula. A different contract formula could produce a different result. The index return and the annuity credit are separate numbers, and the owner’s outcome also reflects withdrawals and applicable charges.

Author analysis and planning guidance. Supporting background: augustarfinancial.com — https://augustarfinancial.com/professionals/annuity-index-resources/

Reasonable planning should examine multiple crediting outcomes rather than assume equity-like average returns. Review low-credit years, sequences of uneven credits, renewal provisions, and how any index methodology affects results. Ask which historical results occurred after the index launched and which were backtested. Neither an attractive backtest nor a bonus establishes a future rate of return.

Author analysis and planning guidance. Supporting background: augustarfinancial.com — https://augustarfinancial.com/professionals/annuity-index-resources/

How the 5 percent withdrawal allowance supports retirement income

The Omega Bonus can provide access to a portion of the account for retirement spending. Its 5% allowance is a withdrawal provision, not a promised investment return or a guarantee that the original premium will remain intact after withdrawals.

The consumer brochure states a 5% withdrawal allowance in years 2 through 10, with only vested bonus amounts and associated interest included in the calculation. Confirm the measurement date and eligible contract value in the actual contract. An unvested bonus should not be treated as immediately available spending money. [6]

For a simple example, a $100,000 eligible withdrawal base produces a $5,000 allowance at 5%. A $120,000 eligible base produces $6,000. That second payment is still 5% of its eligible base; it should not be advertised as a contractual 6% withdrawal rate merely because the original premium might have been $100,000.

The distinction becomes especially important with a premium bonus. Multiplying a $127,000 displayed account value by 5% produces $6,350 mathematically. But that calculation does not establish the available withdrawal when some of the bonus is unvested and excluded from the eligible base. Use the insurer’s actual allowance, not an estimate based on a headline balance.

Account value can decline when money is withdrawn even though the contract has no annual base fee and protects against financial market losses. If an eligible $100,000 account receives no interest credit and pays a $5,000 withdrawal, the simplified remaining value is $95,000. That decline reflects money paid to the owner, not an investment loss or an annual contract fee.

When credits are sufficient, withdrawals and continued accumulation may coexist. The planning question is whether the actual crediting pattern, bonus terms, and withdrawal amounts support the desired balance over time. A percentage-of-value withdrawal can also produce changing dollar payments, so a household needing fixed monthly income should examine that variability.

Ask the adviser to model the proposed withdrawals using the carrier’s authorized illustration system, including the guaranteed scenario. Confirm when surrender charges end, how withdrawals affect guarantees, and which remaining amount could pass to beneficiaries. The end of a ten-year surrender period does not itself restore money already withdrawn or guarantee the original premium remains available.

Tax deferral helps but the account wrapper matters

Fixed indexed annuities generally allow earnings to accumulate without current income taxation until distributed. That resembles the tax deferral offered by traditional retirement accounts, but it does not make all annuity and retirement-account tax rules identical.

Author analysis and planning guidance. Supporting background: www.irs.gov — https://www.irs.gov/publications/p575
www.irs.gov — https://www.irs.gov/publications/p590b

A nonqualified annuity is generally purchased with after-tax money. For typical withdrawals before annuitization, earnings generally come out first and are taxable; recovery of the owner’s investment in the contract is treated differently. IRS Publication 575 explains this distinction. [10]

Source: www.irs.gov — https://www.irs.gov/publications/p575

An annuity inside a traditional IRA or another tax-deferred retirement account does not add a second layer of tax deferral. The insurance features must justify its use there. Qualified Roth distributions receive different treatment, so investors should distinguish traditional and Roth balances when discussing an annuity’s tax benefits. [8,11]

Sources: www.investor.gov — https://www.investor.gov/introduction-investing/investing-basics/investment-products/annuities
www.irs.gov — https://www.irs.gov/publications/p590b

Tax-deferred does not mean tax-free. A retirement income projection should identify how much spending money remains after federal and state taxes. It should also account for possible early-distribution penalties and the distribution rules that apply to the specific account and owner.

Author analysis and planning guidance. Supporting background: www.irs.gov — https://www.irs.gov/publications/p575
www.irs.gov — https://www.irs.gov/publications/p590b

Choose a fiduciary adviser and compare the complete cost

A registered investment adviser, or RIA, is an advisory firm. An investment adviser representative, or IAR, is an individual who provides advice through an advisory firm. An IRA is an individual retirement account. These terms describe different things and should not be used interchangeably.

Investment Adviser Representatives (IARs) must act in their clients’ best interests, but compensation can still create conflicts. Ask what capacity the professional is acting in, how the firm and individual are paid, and whether an insurance recommendation generates a commission. Review the advisory agreement, Form ADV, and Form CRS where applicable. [12–13]

Source: www.investor.gov — https://www.investor.gov/introduction-investing/getting-started/working-investment-professional/investment-advisers
www.investor.gov — https://www.investor.gov/CRS

An independent advisory arrangement may cost less than a particular wirehouse proposal. It may also cost more. Firm size, account size, service level, product selection, and pricing arrangements vary. A defensible comparison uses written proposals for comparable services rather than assuming every RIA is cheaper.

Add the advisory fee, fund expenses, trading costs, platform charges, and relevant product costs. For example, a 1% advisory fee plus a 0.20% fund expense ratio produces approximately 1.20% in annual recurring costs before other charges. On a $1 million account, that is approximately $12,000 in the first year, depending on how fees are assessed.

The fund expense ratio is only one component of total cost. It measures the share of fund assets used for operating expenses. Reducing unnecessary expenses leaves more money available for compounding, but the least expensive arrangement still needs to provide the planning and service the household requires. [14]

Sources: www.investor.gov — https://www.investor.gov/introduction-investing/investing-basics/glossary/expense-ratio

Reduce volatility while measuring the risks that remain

Standard deviation measures how widely returns vary around their average over a specified observation period. Advisers often use it to describe investment volatility. A lower historical standard deviation can indicate a smoother return pattern, but it does not guarantee a smaller future loss or a better retirement outcome.

Sources: admainnew.morningstar.com — https://admainnew.morningstar.com/webhelp/glossary_definitions/mutual_fund/mfglossary_Standard_Deviation.html

Compare portfolios using the same dates, return frequency, and annualization method. Also examine concentration, maximum drawdown, liquidity, inflation exposure, and the ability to fund withdrawals. A strategy that looks stable in ordinary conditions can still be vulnerable to an unusual event.

Author analysis and planning guidance. Supporting background: admainnew.morningstar.com — https://admainnew.morningstar.com/webhelp/glossary_definitions/mutual_fund/mfglossary_Standard_Deviation.html

Insurance contracts require particular care in this comparison. An annuity’s credited account value does not fluctuate like the daily market price of a bond fund, but that does not eliminate insurer credit risk or the cost of accessing money early. A smooth statement value should not be mistaken for unlimited liquidity.

Sources: www.investor.gov — https://www.investor.gov/introduction-investing/investing-basics/investment-products/annuities

Risk management should improve the household’s ability to stay with its plan. The useful question is whether the portfolio can support spending through a difficult sequence of market returns while retaining enough growth potential to address a long retirement and rising costs.

Build a careful Roth conversion ladder

A Roth conversion ladder is a planned series of conversions from eligible pretax retirement assets to Roth accounts over multiple years. The objective is to manage when taxable income is recognized and potentially reduce future tax exposure. The taxable portion of each conversion creates current income tax. [15]

Source: www.irs.gov — https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras

For example, a household could evaluate partial conversions during years with relatively low taxable income before Social Security or required distributions increase income. The appropriate amount depends on a full tax projection, not simply the size of the IRA or a desire to convert everything quickly.

Author analysis and planning guidance. Supporting background: www.irs.gov — https://www.irs.gov/publications/p590b
www.irs.gov — https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras

Evaluate current and projected tax brackets, Medicare premium effects, taxable Social Security, applicable health-insurance subsidies, state taxes, and the cash available to pay the conversion tax. A conversion that reduces future taxable balances can still be unattractive if it triggers excessive current costs.

Five-year rules also require attention. For certain early withdrawals, each conversion has its own five-year period, separate from the rules governing qualified Roth IRA distributions. This is especially important when a conversion ladder is intended to fund spending before age 59½. [11]

Source: www.irs.gov — https://www.irs.gov/publications/p590b

A Roth strategy and an annuity strategy must be coordinated. Contract restrictions may affect how conversions can be executed, and a conversion can require an appropriate valuation of the annuity interest. Have the adviser, tax professional, and insurer confirm the proposed process before assuming a recurring withdrawal will accomplish a Roth conversion.

Inspect what you expect after the election

Use the post-election period to improve the parts of retirement planning you can influence. Revisit your strategic allocation, examine any tactical decisions, confirm near-term liquidity, and compare actual investment costs with what you understood you were paying.

If an annuity is under consideration, require a clear explanation of the bonus, vesting, credited-interest formula, withdrawal rules, surrender value, and death benefit. If Roth conversions are part of the plan, update the tax projection each year. If risk reduction is the objective, evaluate both volatility and the household’s ability to meet spending needs.

The historical record shows that markets can rise after a president loses congressional control. Your retirement deserves a broader foundation than that observation alone. Staying invested works best when the portfolio, insurance decisions, expenses, and tax strategy fit together well enough that you can follow the plan through the next political cycle and beyond.

To discuss how these decisions fit your circumstances, request a retirement planning review through ActiveWealth.com or RetirementResults.com. Bring your investment statements, fee disclosures, tax return, and any existing annuity contracts so the conversation can begin with your actual financial picture.

Firm contact websites: https://ActiveWealth.com | https://RetirementResults.com

Educational disclosure: Historical performance does not guarantee future results. Indexes are unmanaged and cannot be purchased directly. Examples are hypothetical and exclude stated costs and taxes. Annuity guarantees depend on the issuing insurer’s claims-paying ability; annuities are not FDIC insured. Contract features, bonuses, rates, and availability vary. No return, principal-preservation outcome, tax saving, or withdrawal benefit described here is assured unless expressly provided by the applicable contract. Investment, insurance, and tax decisions require an individualized review.

Sources and calculation notes

Research checked November 4 2026. Article body exceeds 5,000 words excluding these notes. Market observations are dated, not forecasts. Product terms are time sensitive; obtain current carrier documents before publication of a specific offer.

[1] US House of Representatives Party Government Since 1857

Website: history.house.gov — https://history.house.gov/Institution/Presidents-Coinciding/Party-Government/

[2] EconStats S&P 500 daily historical OHLC data

Website: www.econstats.com — https://www.econstats.com/eqty/eq_d_mi_2.htm

[3] FRED Nasdaq 100 daily closing levels sourced from Nasdaq

Website: fred.stlouisfed.org — https://fred.stlouisfed.org/data/NASDAQ100

[4] Schwab What the 2026 Midterms Could Mean for the Markets

Website: www.schwab.com — https://www.schwab.com/learn/story/what-2026-midterms-could-mean-markets

[5] SEC Investor.gov Beginners Guide to Asset Allocation Diversification and Rebalancing

Website: www.investor.gov — https://www.investor.gov/additional-resources/general-resources/publications-research/info-sheets/beginners-guide-asset

[6] AuguStar Omega Bonus consumer brochure June 2026 copy hosted by Annuity Atlas

Website: itzxgomruwporrdqfrgv.supabase.co — https://itzxgomruwporrdqfrgv.supabase.co/storage/v1/object/public/brochures/by-hash/b4/b498a89902d47efec37640511810d6365310660a9e3e4a0b64938d5adc57ae83.pdf

[7] Annuity Atlas Omega Bonus 10 product listing with reported 27 percent maximum

Website: www.annuity-atlas.com — https://www.annuity-atlas.com/reviews/product/augustar-omega-bonus-10

[8] SEC Investor.gov Annuities including fees and retirement plan tax treatment

Website: www.investor.gov — https://www.investor.gov/introduction-investing/investing-basics/investment-products/annuities

[9] AuguStar Financial Index Resource Center

Website: augustarfinancial.com — https://augustarfinancial.com/professionals/annuity-index-resources/

[10] IRS Publication 575 Pension and Annuity Income

Website: www.irs.gov — https://www.irs.gov/publications/p575

[11] IRS Publication 590 B IRA distributions and Roth five year rules

Website: www.irs.gov — https://www.irs.gov/publications/p590b

[12] SEC Investor.gov Investment Advisers

Website: www.investor.gov — https://www.investor.gov/introduction-investing/getting-started/working-investment-professional/investment-advisers

[13] SEC Investor.gov Form CRS relationship summaries

Website: www.investor.gov — https://www.investor.gov/CRS

[14] SEC Investor.gov Expense Ratio

Website: www.investor.gov — https://www.investor.gov/introduction-investing/investing-basics/glossary/expense-ratio

[15] IRS Retirement Plans FAQs Regarding IRAs including conversions

Website: www.irs.gov — https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras

[16] Annuity Educator Omega Bonus 10 Variation States listing annual contract fee as none

Website: annuityeducator.com — https://annuityeducator.com/reviews/the-ohio-national-life-insurance-company/fixed-index/omega-bonus-10-variation-states

[17] SEC Investor.gov Mutual Fund and ETF Fees and Expenses Investor Bulletin

Website: www.investor.gov — https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/mutual-fund-and-etf-fees-and-expenses-investor-bulletin

[18] SEC Investor.gov What Are Corporate Bonds including interest rate risk

Website: www.investor.gov — https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/what-are

[19] SEC Investor.gov Updated Investor Bulletin Indexed Annuities

Website: www.investor.gov — https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/updated-investor-bulletin-indexed-annuities

[20] Harry Markowitz Portfolio Selection The Journal of Finance March 1952

Website: doi.org — https://doi.org/10.1111/j.1540-6261.1952.tb01525.x

[21] Nobel Prize 1990 Economics press release on Markowitz portfolio selection theory

Website: www.nobelprize.org — https://www.nobelprize.org/prizes/economic-sciences/1990/press-release/

[22] FRED ICE BofA US Corporate Index Effective Yield November 2 2026 observation

Website: fred.stlouisfed.org — https://fred.stlouisfed.org/series/BAMLC0A0CMEY

[23] CFA Institute Strategic and Tactical Asset Allocation

Website: www.cfainstitute.org — https://www.cfainstitute.org/sites/default/files/-/media/documents/book/rf-publication/2013/rf-v2013-n4-1-pdf.pdf

[24] Morningstar Standard Deviation Definition

Website: admainnew.morningstar.com — https://admainnew.morningstar.com/webhelp/glossary_definitions/mutual_fund/mfglossary_Standard_Deviation.html

[25] Schwab The 4 Percent Rule

Website: www.schwab.com — https://www.schwab.com/learn/story/beyond-4-rule-how-much-can-you-spend-retirement

[26] S&P Dow Jones Indices Index History

Website: www.spglobal.com — https://www.spglobal.com/spdji/en/research-insights/index-literacy/the-sp-500-and-the-dow/

[27] Nasdaq Nasdaq 100 Index Launch History

Website: www.nasdaq.com — https://www.nasdaq.com/newsroom/celebrating-40-year-rise-nasdaq-100-index

Methodology

The return formula is 100 × (ending close ÷ Election Day close − 1). The S&P 500 levels are 465.65 and 560.39 for 1994–1995, and 1,382.84 and 1,476.71 for 2006–2007. The Nasdaq 100 levels are 407.44 and 565.71, and 1,741.53 and 1,961.64, respectively. Returns are price only and not annualized. The study is explicitly restricted to the postwar record and simultaneous changes in control of both chambers; only two events permit a contemporaneous comparison of both named indexes.

Product verification note

The proposed 60/40 allocation is a general planning framework, not a personalized allocation. The description of a one-time insurer-paid commission, lifetime service, and exclusion of FIA assets from recurring advisory billing reflects the firm arrangement supplied for this article. Confirm those statements against the actual client agreement and compensation disclosures before use. No specific ETF expense ratios or sustainable withdrawal outcomes are promised.

The 27% maximum is reported by a secondary product listing and was not independently confirmed in a current carrier rate sheet. The carrier brochure located during research predates that reported increase. No annual contract fee is reported by the separate listing in source 16; confirm that the selected contract and allocation have no fee-bearing options. The article uses the carrier brochure’s 5% allowance for years 2–10 and excludes unvested bonus amounts from its calculation. It does not promise that withdrawals leave the original premium intact. The 5% numerical examples are arithmetic explanations, not a carrier illustration.

Active Wealth Management, Inc. | 1740 Grassland Parkway, Building #206, Alpharetta, GA. 30004 | Phone: (770) 685-1777
Investment advisory services offered through Brookstone Capital Management, LLC (BCM), a registered investment advisor. BCM and Active Wealth Management are independent of each other. Insurance products and services are not offered through BCM but are offered and sold through individually licensed and appointed agents.

Disclosures:

Investment advisory services offered through Brookstone Capital Management, LLC (BCM), a registered investment advisor. BCM and (insert your DBA name here) are independent of each other. Insurance products and services are not offered through BCM but are offered and sold through individually licensed and appointed agents

Registered Investment Advisors and Investment Advisor Representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interests of our clients and to make full disclosure of any conflicts of interests. Please refer to our firm brochure, the ADV 2A item 4, for additional information.

Any bonuses mentioned may be subject to additional restrictions and regulations based on the offering annuity company. You may not receive the bonuses if the contract is fully surrendered or if traditional annuitization payments are taken, and if the policy is partially surrendered, it could result in a partial loss of bonuses. Because these are bonus annuities, they may include higher surrender charges, longer surrender charge periods, lower caps, higher spreads, or other restrictions that are not included in similar annuities that don’t offer a bonus feature.

Why Staying Invested After a Midterm Election Matters for Your Retirement

Why Staying Invested After a Midterm Election Matters for Your Retirement

What history actually says about losing both chambers

How the S&P 500 and Nasdaq 100 performed over nine months

Stay invested with a plan you can actually follow

Strategic asset allocation establishes the foundation

Tactical asset allocation allows defined adjustments

The traditional 60 40 portfolio and its intellectual roots

A new 60 40 framework for growth and contractual protection

Reduce advisory billing on the portion placed in the annuity

Build withdrawals without automatically buying an income rider

Replace bond price exposure while understanding the remaining rate risk

Evaluate bond yields rather than a stock style earnings multiple

Why now can be a useful time to evaluate a bond replacement

Consider whether a fixed indexed annuity can serve a conservative role

Evaluating the AuguStar Omega Bonus and a proposed 27 percent bonus

Understand the index strategy before expecting market like returns

How the 5 percent withdrawal allowance supports retirement income

Tax deferral helps but the account wrapper matters

Choose a fiduciary adviser and compare the complete cost

Reduce volatility while measuring the risks that remain

Build a careful Roth conversion ladder

Inspect what you expect after the election

Sources and calculation notes

Methodology

Product verification note

Related Posts