Retirement Planning Blog

Weighing the Pros and Cons of Annuities for Retirement Income

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Are you wanting reliable income in retirement? Annuities are one option that you might turn to. An annuity pays you an ongoing income stream and lets you avoid running out of money. It’s the only thing besides Social Security that will generate guaranteed income for life. But of course, annuities have pros and cons, just as everything does.

When you start an annuity, you own a ‘money for life’ contract between you and a life insurance company. The insurer promises to give you regular payments for a set period or the rest of your life. Insurance companies have a strong record of meeting these commitments in all sorts of economic conditions and stock market cycles.

Annuities come in a variety of flavors. Some annuities are just base contracts, while other annuities offer add-on benefits that offer a lifetime income stream and liquidity. In other words, you have many choices and ways to customize an annuity to your personal goals, needs, and financial situation. It’s a matter of finding the right annuity for you.

In this article, we will go over the pros and cons of annuities for retirement income. As a guaranteed income source, annuities are a great way to maximize your money, but they aren’t for everyone. We will also talk about situations in which they can really make a difference.

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6 Retirement Withdrawal Strategies to Maximize Your Income

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How can you make the most of your income in retirement? People are living longer, and that adds up to more years of spending that they need to plan for. To ensure your money lasts as long as you need it, you might explore these different retirement withdrawal strategies to see if any might be right for you.

These retirement withdrawal strategies vary in their approach and flexibility. Sometimes a withdrawal strategy may work well in certain economic and market conditions than in others. For example, one withdrawal strategy uses a percentage-based rule, which works well when investment markets are posting gains and retirement investments rising in value.

Over your career, you may have built up funds in your 401(k) (or another workplace retirement plan). In retirement, the matter of deciding how to manage savings largely falls on our shoulders. What makes this even trickier is that investing for retirement is completely different from retirement income planning. In that case, you have to figure out how to turn your nest egg into reliable income that lasts for the rest of your lifetime.

Use these retirement withdrawal strategies as a starting point in your income planning. By seeing each one’s upsides and downsides, you can see how you can make the most of your money for as long as you need it.
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Retirement Plan Review: How and When to Evaluate Your Plan

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Do you have a retirement plan set for your financial future? How often should you review your retirement plan in case you might need to adjust anything? Life changes or other things outside of our control can take our financial journey in a new direction. Your retirement plan should let you be able to pivot and change course as such things happen.

It’s good to have routine reviews of all aspects of your retirement plan so that you stay on point. Life is dynamic, and those unexpected events can otherwise have a big impact on your financial well-being. If your retirement plan is still on track, that is good news. If it isn’t, your financial professional can help you make corrections that steer you back in the right direction.

Since retirement planning is a moving target, we will go over a few things to keep in mind for your retirement plan review meetings in this article. That will include how often to review your plan, how to evaluate your plan, and when re-evaluation might be a good idea. Whether you are starting to plan for retirement in mid-career or you want to make sure that your current plan is on the right path, this guide will help you evaluate your financial progress.

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Social Security Benefits COLA 2024: What to Know

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The word is out about the Social Security cost of living adjustment (COLA) for 2024! The Social Security Administration has officially said what next year’s COLA will be.

In 2024, Social Security beneficiaries will get a 3.2% raise in their benefits. While it’s not as big as the 2023 COLA of 8.7%, it’s still quite a lot. This is good news for retirees and others receiving Social Security payments for a few reasons.

One, because it means their payments will be higher to keep up with the rising costs. Secondly, inflation is going up but not quite as high as it was in the past two years. That means that retirement dollars won’t have their purchasing power eroded as much (although inflation is increasing and it will go down a bit). Still, the prices of everyday goods and services are high as-is, especially for retirees on a fixed-income budget.

Let’s go through what the 2024 COLA for Social Security means, how they calculate this raise, and what you can do to make your money last longer. With statistics showing people spending as much as one-third of their lives in retirement, knowing how your Social Security benefits and other income sources work together can help you stretch your retirement dollars.

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How Many Years Should You Plan for Retirement?

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Planning for retirement is a crucial life phase, but how many years should you plan for in retirement? Ideally, you should prepare for at least 30 years of retirement living. Your financial plan needs to spell out how you will generate enough income for that timespan.

Of course, retirement looks different for everyone, and you may have an idea of how long or short yours might be. Ultimately, it’s very difficult to estimate how many years your money will need to last. You certainly don’t want to run out of income in your golden years. Unfortunately, many people often underestimate how long they will spend in retirement, which can have big effects on their financial security.

Getting this “right” is one of the most difficult parts of retirement planning. That is why it’s better to err on the side of caution and plan for a long-time, post-career span of at least 30 years. Even so, how do you account for this in your income planning? What steps can you take to keep your financial security intact during this extended period?

In this article, we will look at how long retirement can last, what you can do to maintain your financial well-being, and other things to keep in mind.

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Guaranteed Retirement Income Plans: Unlocking the Key to Lasting Financial Peace

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Everyone has a personal vision of what their retirement will be. What kind of retirement lifestyle do you want? How much will it cost? Apart from the vision, it’s good to know how you will pay for your retirement quality of life and where your income will come from.

Many income strategies can be tailored for your financial situation. However, only a guaranteed retirement income plan can provide you with a game plan for secure, permanent income streams that don’t change with investment market ups and downs.

The issue with other standalone income planning approaches, such as a bucketing strategy or a systematic withdrawal strategy, is that your funds can go up and down in value with market swings. With a guaranteed retirement income plan, your income is protected and keeps coming to you like clockwork each month.

Of course, a guaranteed retirement income plan does have some limits. If the payouts from your income source are fixed, it may be hard for your money’s purchasing power to keep up with inflation. You also tend to give up some liquidity in exchange for the assurance of protected income for life, although some financial vehicles come with withdrawal provisions for a little bit of liquidity.

In this article, we will go over the lynchpins of an income plan paying a steady, guaranteed income during your retirement years: Social Security, annuities, and pensions. Let’s talk about these different income sources and how to optimize them for a financially confident retirement.

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10 Strategies for Protecting Your Retirement and Securing Your Golden Years

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After decades of work, you want to enjoy retirement on your own terms. It’s a big deal with a lot at stake. But a quality retirement doesn’t just come together. You need effective financial strategies set for protecting your retirement financial security.

Even if you have been diligent about saving for retirement, various risks can take your plans off the rails. Unexpected financial snags could force you to work longer, downsize your retirement dreams, or settle for less in other ways. That is why having strategies that protect your retirement is so important.

With careful and well-thought-out planning, you can safeguard your financial outlook and put yourself in a better position for a comfortable, stress-free retirement. Of course, no two people are ever the same, so these strategies may look different for various situations.

Let’s get into ten simple and effective ways for protecting your retirement and making the most of your post-career years. Once you have gone through these options, consider reaching out to an experienced financial professional to see how they can assist you.

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Navigate the Retirement Risk Zone: What You Should Know About It

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Retirement is an exciting milestone after years of work. It’s a new chapter where we can relax, spend time with family and friends, travel, support personal causes, pursue opportunity, or else define our post-career life as we would like. Indeed, many retirees are taking their golden years by the horns and enjoying it on their own terms like no generation has before.

Of course, the path to a secure retirement has challenges. Part of that is navigating the “retirement risk zone,” or the 5-10 years leading up to retirement and in early retirement itself. This period has a big influence on your retirement money, so the strategies that you put in place (or don’t) could make a difference.

Given that, it’s natural for questions to come to mind. What should you look out for in the retirement risk zone? What sort of options do you have to protect your financial future during this time? Why is the retirement risk zone such a crucial point for your retirement outlook?

In this article, we will go over more about the retirement risk zone, its unique financial risks, and some ways to help you navigate this uncertain phase of life.

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How to Plan for Retirement in Your 50s: Steps to Aim for a Comfortable, Secure Future

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Once you reach your 50s, retirement is around the corner, but you probably have many life priorities at this point. Family, work, and other responsibilities take up a lot of attention. Planning for retirement may be the last thing on your mind.

Nonetheless, it’s still important to pause and reflect on what will matter to you in this next life chapter, even if you expect that your retirement will be 10 or more years from now. Seeing where you are financially and whether you can take more steps toward your retirement goals will give you more time to get everything in place. Of course, one of those goals will be ensuring that you have enough income to last for all of your golden years.

In your 50s, there is also the risk of “sequence of returns,” or having investment losses in the years just before or in early retirement. No one can predict what the markets will do, and the unfortunate timing of investment losses is what makes this a real hazard. Even small losses can have a heavy hand on your retirement income and what sort of lifestyle that you might be able to sustain.

So, how should you plan for retirement in your 50s? In this article, we will go over some high-level steps to follow, explore your options, and set a plan so that you can have lasting financial security once you are retired.

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Bridging the Retirement Gap: Ernst & Young Study Shows How Insurance-Backed Strategies Beat the Odds

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After working for many years, people want to have the best chance that they can get in enjoying a secure retirement lifestyle and staying retired. That brings up a crucial question in retirement planning. What financial strategies are most likely to get retirees to that point?

In a study conducted by Ernst & Young, researchers looked at a variety of financial strategies to see which ones would perform best. It brought up an intriguing result: financial strategies with permanent life insurance and deferred income annuities beat out investment-only strategies, providing retirees with enhanced benefits.

EY researchers looked at five different strategies using Monte Carlo analysis. The study findings claimed that taking income from annuities and permanent life insurance in retirement could indeed create better results for retirees.

In this article, we will dive into the EV study, its findings, and explore the reasons behind why these insurance-based strategies may help retirees beat the odds.

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Next Steps to Consider

  • Start a Conversation About Your Retirement What-Ifs

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    Start a Conversation About Your Retirement What-Ifs

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    What Independent Guidance
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    See how the crucial differences between independent and captive financial professionals add up. Learn More

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    Stories from Others
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