Chances are you know the concept of asset allocation. As Forbes contributor Mitch Tuchman puts it, asset allocation is the “collection of investments you own,” depending on your risk tolerance and your desire for potential investment returns.
In the investing world, it is a strategy of apportioning assets to achieve a strategic balance of potential risks and returns that is right for an individual investor.
What Does That Have to Do with Retirement Planning?
That’s all good and fun, you may say. But what does that have to do with retirement planning?
Well, from a planning standpoint, plenty. It is the same question of deciding how to allocate a retirement portfolio.
But in this case, decisions revolve around striking a balance between managing potential risks and achieving desired retirement outcomes, like income certainty, wealth protection, or other goals. In financial lexicon, this strategy is known as “diversification.”
When it comes to retirement planning, diversification is arguably an essential part of a successful retirement strategy. But why? Read More
Women are taking a greater role in household money matters, according to a new report by Allianz Life. But despite this, many women face the prospect of an underfunded retirement.
In the study, 51% of women said they are the “chief financial officer” of their household. When it came to managing finances, 53% said they hold “a great deal of responsibility” or “all of it.”
Nevertheless, signs indicate that women face unique challenges on the retirement planning front. Rising life expectancy, lower lifetime earnings, and reduced savings all contribute to a significant retirement income gender gap, reports Prudential Research.
Sure, these challenges may seem considerable. But the good news is you can do many things to strengthen your retirement security and financial confidence.
Confident decisions start with being well-informed. So, as you plan for your retirement, it’s important to understand the challenges facing you and other women today. Here’s a quick look at some common issues that will likely come your way. Read More
Many retirement investors use annuities for guaranteed income. But some find their annuity payout options to be confusing. There are a variety of methods to receive annuity income payments. With so many choices, it can be hard to decide what’s right for you.
People tend to feel more confident in their decisions when they are well-informed. So, this article will take a look at some common annuity payout options and how they are defined.
Before going into basic details, it’s important to recognize that your payout choices will differ among insurance companies. Some carriers may not provide the same annuity payout options you have with another carrier. Or the specific conditions and details of the payout options might vary. Keep this in mind as you choose how you want your future income payments to be calculated. Read More
The holidays are approaching, and everyone is stepping into high gear. From Thanksgiving dinners and seasonal gift shopping to family get-togethers, these are busy but joy-filled times. Aside from the festivity, fellowship, and merriment, though, it can also be financially stressful for many households.
The holiday season brings more pressure to spend, and this can put strain on retirees, many of whom live on a fixed income. For lots of Americans, there’s also the issue of personal debt. Having the pressure of growing debt loads, many people feel the impact of debt on their retirement goals, not to mention other objectives. And excessive holiday spending can be partly to blame. A survey by NerdWallet found that 24% of shoppers overspent last year, while 27% made no budget at all.
The good news is with the right steps, financial wellness is within reach. If you are in your 50s or 60s, it’s prudent to start taking steps to set goals, plan for the future, avoid financial missteps, and make changes so your money works for you.
Here are some steps to get your financial house in order for the year-end and for greater financial confidence in the future. Read More
Considering its interest rate potential, a multi-year guarantee annuity, or MYGA annuity, may seem pretty “boring.” This can happen especially when you compare it to a fixed index annuity and its growth potential.
But while many people see indexed annuities as appealing, not everyone does. Some retirement investors just want an unchanging, fixed growth rate for their money. The prospect of changing interest rates, from time to time, doesn’t appeal to them.
If you desire straightforward choices like this, a MYGA annuity might be of interest. Unlike with a fixed index annuity, a MYGA annuity gives you a fixed interest rate over time. In many cases, this interest rate doesn’t change in later contract years, like you often get in a traditional fixed annuity.
As you think over different types of annuities, it’s important to understand your options. Here’s a quick guide to understanding MYGA annuities, their benefits, and potential drawbacks in retirement planning. Read More
The interest rates that an annuity earns largely hinge on two things: the type of annuity you have, and how the annuity is credited interest. Some annuities declare the interest rate ahead of time.
Other annuities earn interest based on ups or downs in an index, like the S&P 500 price index. Most annuities come with compounding interest. However, you may come across some contracts that offer simple interest growth.
If you are researching the potential for typical annuity interest rates, it’s important to know how annuities can differ by growth potential. Here’s some crucial information to consider as you think through your potential options. Read More
When it comes to annuities, people can have many questions. “What is the annuity exclusion ratio?” is a common one, especially for those considering immediate annuities. Many investors also ask about how the exclusion ratio may affect their tax burden in their retirement.
The exclusion ratio is an important number. It helps calculate the amount in each of your income benefit payments that won’t be taxable. Several investors like to know its basic ins-and-outs so they can get an idea of what their taxes will be.
What many people don’t know is that the annuity exclusion ratio may, in fact, reduce their overall tax liability. Since taxes can take a big bite out of retirement income, it certainly can pay off to understand this number and how it might impact you. Read More
As the holiday festivities roll around, many of us are thinking about the new upcoming year. What steps can we take to start off with a clean slate in the new year?
The top priority is getting our financial house in order, but what can we do to accomplish that?
What can help is having a year-end financial review and creating a well-balanced plan for the future, preferably with a financial professional. Not only will it help you start off strong, but it also will bring clarity and precision to your financial outlook.
Of course, this proactive approach doesn’t bring just short-term benefit. A year-end review and wrap-up of remaining plans can help you prepare well for long-term retirement goals and overall financial security.
Read on for some quick tips to consider during your annual review and planning process. Read More
It sure can feel good to be in the homestretch toward retirement. But retired life is a different ballgame than the years we spent working and accumulating wealth. People are living longer, and this increases the risk of outliving our money – not to mention other challenges that can put our goals at jeopardy.
While there’s no such thing as a fail-safe strategy, it definitely helps to have a retirement financial plan for ever-evolving economic conditions. Knowing what to do to plan is certainly part of that. But it’s just as important to understand what not to do. Otherwise inferior decisions could negatively affect your retirement lifestyle for many years to come.
Here are five potential missteps you should strive to avoid as you look ahead to retirement. Read More
Good news! Next year, Social Security beneficiaries will get their biggest raise since 2012. The Social Security Administration reports that monthly benefits will receive a 2% Cost-of-Living Adjustment (COLA) in 2018.
For the average retiree, the increase amounts to around $27 extra a month. For the year, it adds up to an extra $324 in benefit payments. Social Security beneficiaries will see increased payments in January 2018, while increased payments for SSI beneficiaries will begin on December 29, 2017.
While this is welcome news, another development may offset the increased benefits for retirees. Many retirees actually may see little or no increase in payments. Most beneficiaries have Medicare Part B premiums taken from their Social Security. For those who have benefited from the “hold harmless” provision of Medicare law in recent years, Medicare may eat into some or all of the raise.
Let’s get more into the details of this now. Read More
