Retirement Preservation & Income Planning
“It’s tough to make predictions, especially about the future.”
Baseball Hall of Famer – Yogi Berra

OK, so retirement planning is a very broad subject meaning many different things to many different people.  In most people’s minds, it brings about visions of dealing with Investment Advisors or Financial Planners and stocks and bonds or mutual funds and risk or market ups and downs and, most of all, potential losses.  Nobody likes to talk about, or even think about, losses.

However, what if you and I just talked about “safe money” ways to conserve and grow your hard earned nest egg while providing a plan to distribute it in a manner that ensures you won’t outlive what you’ve worked so hard to save?  What if we have a discussion that addresses the reason many of you created a retirement savings plan in the first place?  It doesn’t matter how you saved; 401k, IRA, SEP, mutual funds, etc. The real “truth” is many of you are depending on being able to convert these savings into income so you can retire.
However, according to research studies, one of the BIGGEST mistakes people make with their savings (besides not saving enough) is they fail to plan properly and take out too much of their earnings in retirement each year (especially in the early years).  This greatly increases the likelihood that their savings will run out before the end of their life.  If you haven’t already determined what implications this holds for you, this website has a “tools” function containing a number of planning calculators for your use.  The results may surprise you.  The good news is there are strong, safe, trustworthy answers – read on.

Income Annuities: Maybe an income annuity guaranteed by a highly rated life insurance company could be right for you. Today’s income annuity products come in many forms including the traditional Immediate Annuity where you make a single payment to an insurance company and they guarantee you an income check for an optional time period you choose.  These guaranteed payouts are backed by the financial strength of the company issuing the immediate annuity, so your income payment is paid like clockwork. Once started, immediate annuities generally have very limited access to change because of these guarantees (but ask me about a unique laddering concept).

Deferred/Fixed Indexed Annuity: If flexibility in future years is a concern, many modern Deferred Annuities have new income opportunities called Lifetime Income Benefit Riders. “LIBRs” offer you the benefit of lifetime income payments that you can’t outlive with the flexibility of controlling and changing your deferred annuity account with a LIBR. A deferred annuity allows you to start an income stream immediately or wait for as long as 20 years. Once income has started, it can be stopped and then restarted at a later date. If cash is needed, a withdrawal from any remaining cash value in the deferred annuity can be made (future income payments would be adjusted on a pro-rated basis).

Fixed Index Annuities (FIAs) are a form of fixed annuity where each contract year you can receive a declared interest rate or an indexed interest rate. Declared rates are set at the beginning of each contract year for that year. On the other hand, indexed interest rates are calculated and credited at the end of a preset term (normally one year).  FIAs have become quite popular over the last few years due to their potential for higher interest rates linked to a stock index (usually the S&P 500) with the principal protection afforded traditional Fixed Annuities. Even when stock index results are negative, your account doesn’t lose money due to market volatility.

For complete information on retirement issues of all kinds, click here.  You will be redirected to my exclusive retire village website.  While you’re there, be sure to sign up for regular retirement tips and the free monthly newsletter.