As you get closer to retirement, it might be fascinating to think about the options for what follows next. Perhaps you’ll spend a month or more traveling to exotic locations. Alternatively, you may turn a hobby you enjoy into a part-time job.
You may be thinking about preparing your finances, as many people do as they prepare for this new period of life. The possibility of a recession and the fiscal health of Social Security are the top two economic concerns for most pre-retirees, according to Athene’s new national public opinion study done in partnership with Talesbuzz’s Personal Finance magazine. Eighty-one percent are concerned that Congress will reduce future Social Security benefits to shore up the program.
Furthermore, six out of ten workers are concerned about running out of money later in life. Is there a bright spot? Many respondents stated they would be less concerned about running out of money if a larger portion of their retirement income was guaranteed.
How Guaranteed Income Affects Retirement Well-Being
The research also discovered that retirees who receive at least some income from an annuity had a high confidence in their ability to live comfortably in retirement. They do so at a much higher rate than their counterparts who do not have that safety net.
Of course, the retirement scene has evolved since the previous generation. Traditional pensions that guarantee lifetime income are still widespread in the public sector. However, according to the Congressional Research Service, only 15% of workers have access to one in the private sector.
Additionally, roughly 65% of private sector workers have access to 401(k)-style plans. This gives workers more autonomy in determining their savings rate and investment allocation.
Even without a traditional pension, today’s retirees and pre-retirees can use an annuity to create a similar guaranteed lifelong income stream with the guidance of a financial advisor.
Retirement can and should be a time when people enjoy the benefits of a long career and are certain that they will be able to enjoy the plans they’ve made. An annuity can assist in providing the guaranteed income that enables them to do so.
Creating a Reliable Income Stream
Begin by calculating how much you spend each year on essential living expenditures. Then, adjust the amounts to account for how that may change in retirement. Medicare may cover the majority of your medical bills. However, it does not cover everything, so you must also budget for healthcare costs and premiums. Subtract any annual sources of guaranteed income from your estimated yearly retirement living expenses.
Most retirees are eligible for Social Security, which annually provides a monthly stipend adjusted for inflation. You can begin receiving retirement benefits as early as age 62. However, if you wait until age 70, your payout will continue to rise. Suppose you intend to calculate your estimated benefit amount. You must first establish the age at which you intend to begin receiving benefits, your highest earning years, and the impact of income taxes and inflation adjustments. Once you turn age 60, the Social Security Administration will mail you a benefit estimate, or you can determine your expected amount by signing up for an online account at myaccount.ssa.gov.
Do your projected annual living costs exceed your guaranteed annual income? If this is the case, savings can assist in bridging the difference. You can also utilize an annuity’s guaranteed income to pay for necessities. Even if you live to be age 100 or beyond, an annuity can help safeguard you from outliving your money.
Investigating Annuity Alternatives in Greater Depth
While all annuities are meant to generate income, there are numerous types to match your retirement goals and level of risk tolerance. Here are some common alternatives:
Immediate Annuity: Your premium contribution is transformed into a guaranteed income stream for life or for a specific period with immediate annuities, which pose the lowest risk.
Fixed Annuity: Fixed annuities guarantee a fixed interest rate for a set amount of time. The guarantee may appeal to you if you are willing to forego the possibility of bigger returns when markets increase.
Fixed Indexed Annuity: Fixed indexed annuities have become increasingly popular with persons with a modest appetite for risk in the middle of the spectrum. While secured by a 0% floor, you can earn interest credits that are partially based on the growth of an index of the stock market. You won’t receive any interest credits for a period if the net change in the index over that period is negative. However, you’ll never receive less than nothing.
Registered Index-Linked Annuity (RILA): These items are intended for persons with higher risk tolerance. Registered Index-Linked Annuities (RILAs or buffered annuities) provide the possibility for index credits related to index performance while also giving some market loss protection.
Annuity with Variable Payments: Because your money is placed directly in the market, this type bears the highest risk. Variable annuities provide the largest growth potential of any annuity product. However, they also leave you open to market loss.
Gaining Peace of Mind in Challenges Times
To keep up with inflation, retirees’ investment portfolios must include some exposure to stocks. However, when a bear market comes, many investors sell their equities to limit losses. Paper losses eventually turn into actual losses. These individuals may end up waiting on the sidelines, missing out on the critical early days and weeks of a market recovery.
As you ponder your new prospects, retirement can be an exciting time. Having a source of guaranteed income, such as an annuity, can allow you to focus more on those new chances and less on financial concerns, such as running out of money later in life.
Contact Information:
Email: [email protected]
Phone: 4028853781
Bio:
Introducing Erick Gale, the founder of Erick Gale Insurance, a dedicated insurance agent on a mission to protect the well-being of his clients. Erick entered the financial services industry in 2011 and has since become a trusted name in the insurance sector, serving clients in several states, including Nebraska, Illinois, Texas, Pennsylvania, Ohio, Michigan, Virginia, and Tennessee, with a focus on individuals aged 45 to 80 and Federal Employees.
Erick’s journey into the world of insurance began when he was recruited by a friend who saw his potential to make a positive impact on people’s lives. His decision to enter this business was driven by a deep-seated desire to help individuals protect their loved ones and their own health. What inspires Erick the most is witnessing the commitment people have to secure their family’s future and their health, and he’s dedicated to being a part of their journey.
For Erick, the most rewarding aspect of his job is providing his clients with peace of mind, knowing that all their responsibilities are taken care of. He takes pride in guiding his clients to find the exact insurance policies that meet their unique needs. Erick’s careful, safe, and hard-working approach ensures that his clients receive the personalized attention and coverage they deserve.
One crucial life lesson Erick has learned and applied to his business is never leaving loved ones in a vulnerable position. This principle guides his work as he helps clients build a secure future. His dedication to providing tailored policies that fit his clients’ needs sets him apart from others in the industry.
Erick Gale holds a Bachelor’s Degree in Supply Chain Management from Bellevue University, showcasing his commitment to excellence and dedication to continuous learning. While Erick is single and without children, he finds joy in listening to music and working on cars in his free time.
As a testament to his dedication, Erick proudly notes that he passed the insurance exam on his first attempt, showcasing his commitment to excellence and expertise in his field.
Erick Gale, the founder of Erick Gale Insurance, is more than an insurance agent; he is a protector of lives and a provider of peace of mind. With his commitment to personalized service and unwavering dedication to his clients’ well-being, Erick is your trusted partner in securing your future and the future of your loved ones.
