When your parents and grandparents retired, they might have lived a for few more years, or maybe a decade or so after retirement. But today’s retirees enjoy much longer life spans, with many retirees living for twenty, thirty, or even more years after their last day on the job. Your retirement years could last nearly as long as your career did!
That’s great news, of course, and we have better nutrition and healthcare to thank for it. But the “downside” of a longer life is that we all must prepare for a much longer retirement. That’s why you’re following a carefully designed plan to save for your future. You set savings goals, try to max out your retirement plan contributions, and hope to pay off your debts before you retire. You might even be considering part-time work or a second career in retirement, to boost your expected income.
Yet, despite all of your careful planning, you might still feel worried about the future. You know that inflation, the rising cost of healthcare (much of which you will pay out of pocket), and several other factors might cause you to feel disappointed with your retirement lifestyle. You worry that your budget won’t stretch as far as you need it to.
Does any of that sound familiar? Then you might be interested to know that there are ways to generate a lifetime stream of income!
We often use annuities to accomplish this goal. A lump-sum annuity might not have been popular with your parents or grandparents, because they weren’t sure they would live long enough to see a return on their money. But nowadays, annuities are becoming more common, because most of us can expect to live quite a long time after we retire.
In exchange for a lump-sum payment, your annuity contract will provide you with regular and predictable income. Many of these contracts last for decades, or even a lifetime, depending upon how you choose to structure your policy. There are over 1,600 different kinds of annuity products on the market, with varying terms, fees, and conditions. As you can see, there is probably an annuity product that is beneficial for you – but you should seek professional guidance in order to select the right one. Call our office to schedule an appointment, and we can discuss the benefits and potential drawbacks of an annuity. We will be happy to answer your questions about annuities, or any other retirement dilemma.
Portions of this article have been excerpted from “Retirement planning: 4 safe ways to boost income” by Consumer Reports, on Yahoo Finance.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
Fixed annuities are long-term investment vehicles designed for retirement purposes. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Guarantees are based on the claims paying ability of the issuing company. Withdrawals made prior to age 59 ½ are subject to a 10% IRS penalty tax and surrender charges may apply.
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