As many of us know, October is the renewal month for many bank certificates of deposit. Some common selling points for bank CDs are low risk and steady earning potential. But today’s low interest rate environment throws some real curveballs for retirement savers.
In fact, CD rates have remained low for some time now. And what interest rates might be in the future still remains unclear. With the diminished prospects for wealth accumulation, many people seek an alternative to bank CDs and their low yields.
When used properly, annuities are often tapped as transfer-of-risk strategies. Many Americans rely upon them for lifelong income security, dependable asset protection, or other financial assurances. Nevertheless, annuities of the fixed variety – particularly fixed index annuities (FIAs) and multi-year guarantee annuities (MYGAs) – can also offer value as tax-efficient savings vehicles.
If you are looking for alternatives to CDs, here’s a quick look at fixed index annuities and multi-year guarantee annuities – and how they can differ from today’s low-yield bank CDs as retirement-savings solutions. Read More
When it comes to lifestyle, it can be said that we have “two” lives – or rather two different life phases. The first phase is the working years, or when we work for a living. The second phase is retirement, or when we can choose to stop working, should we desire to, and do what we want. From volunteering or spending time with family to social gatherings, vacation getaways, gourmet dining, or personal luxuries, there’s no shortage of ways we can enjoy our time in retirement.
However, many Americans who are retired or nearing retirement face unique barriers – financial challenges which can keep them from enjoying the lifestyle they worked hard for. Preparation is key, so the importance of planning ahead can’t be overemphasized. Here’s a quick look at some common financial challenges to account for. Read More
Chances are you have heard of “safe money” at some point. From financial talk shows and radio commercials to television broadcasts and retirement seminars, it’s a concept that is all over the place. “Safe money” is commonly defined as the money you can’t afford to lose.
But for those of us approaching retirement, what does that mean in real-world terms? Many advisors explain safe money in investment terms. For example, it could mean discussion of “safe money investments,” or vehicles with less exposure to market volatility.
A downside with this approach is its investment planning focus. We have discussed how retirement planning should emphasize monthly income over asset values in its goal-setting. After all, retirement is a life stage in which we draw on a nest egg and other income sources for income – wealth we have accumulated over many years for this timespan. So, when discussing “safe money” in retirement, we shouldn’t frame it in terms of only the possibility of money losing value. Read More
Record numbers of Americans are retiring. According to the U.S. Census Bureau, there will be over 80 million retirees by 2040. Life expectancies are on the rise – people are living longer. And a large proportion of Americans worry about market risk. They get anxious over how the stock market performs or fear potential losses.
Because of these and other reasons, some Americans have been adopting annuities as transfer-of-risk strategies. They want the guarantees associated with these contracts – particularly the assurance of lifelong income, for many annuity buyers. For those of us worried about outliving our money or other income-related risks in retirement, this raises an important question: “Should an annuity be part of my income strategy?”
It’s indisputable that many Americans desire guarantees in their financial plan, and this number continues to grow. But that doesn’t mean annuities are right for everybody. If you are wondering whether an annuity is for you, here’s a quick look at some situations you may want to consider. Read More
What is the more important marker in retirement planning: income or assets? This is an important question for retirees. After all, retirement can last for 30 years or longer – it isn’t a time to make mistakes. Inferior planning may lead to income gaps or other unnecessary financial complications.
In past discussion, we have noted how income planning differs from investment planning – especially with its focus on monthly income. Retirement is a phase of “distribution,” or where we draw on a nest egg for income. It’s different from the working years, when we are accumulating assets and can “refill the bucket” with employment income, should we incur investment losses. Seniors don’t have this luxury during their retirement years. For this reason, among others, retirement income arguably should be the primary focus.
Here’s a look at some reasons why income should be a planning priority – and why you may want to account for this in your planning, as well. Read More
There are many decision-points leading up to retirement. Much of this process relates to financial planning. Should we wish to maintain a comfortable lifestyle, we must have sufficient income to support it. An effective retirement plan will lay out not only income goals we need to achieve, but also personalized strategies to sustain income security.
In earlier years, many of us focused on investment strategies to build up wealth. You may have worked with a financial advisor to find investments or investment packages with solid return potential over time. Or you may have engaged in investment planning yourself. However, retirement brings change, and this includes a shift in financial planning focus – an emphasis on planning for income.
Here’s a quick look at how income planning is different from investment planning – and why you may want to incorporate an income-focused retirement planning approach. Read More
Is your retirement income plan well-suited to your financial needs and goals? Whether you’re creating a personalized strategy or examining one, it’s an important question to consider. After all, any income gaps or shortfalls could lead to real financial setbacks.
With that said, here are some markers you can use to evaluate your income strategy. Read More
As we approach retirement, we face many decisions. Many of these decision-points revolve around future financial life. Retirement income planning – or creating a plan to cover expenses and retirement uncertainty – is an essential step.
But everyone has different income needs, and they vary in their readiness for retirement. Plus today’s retirement landscape is far different than what our parents and grandparents dealt with. In the past, a steady pension from an employer, dependable income from Social Security, and a small fund of retirement savings was standard fare. Now those days are largely a distant memory for most Americans. Read More
Finances continue to be a top retirement concern, as surveys show. In a recent study by the American Institute of CPAs, 57% of CPA financial planners reported their clients’ foremost retirement concern was “running out of money.” When asked what the sources of this client stress were, 76% of the financial planners said healthcare costs. Other causes of financial stress were lifestyle expenses (52%) and unanticipated costs in retirement (47%).
Given these concerns, it’s critical to ensure we’re ready for monthly income needs in retirement. But there are a number of retirement expenses which can give us the slip. Some costs are hard to project, such as healthcare costs. Then there are life changes which can completely transform a retirement budget, such as doting on grandchildren.
Here’s a look at some retirement costs to keep in mind – and to help you avoid the financial shock of unexpected or harder-to-predict areas of retirement spending. Read More
Through careful deliberation, many Americans have figured out their retirement planning requirements. But a comfortable retirement needs more than just creation of a financial strategy. It also means sticking to the plan you have developed.
Of course, there are some events beyond our control, events which can disrupt a retirement plan. Stock market downturns, costly unforeseen situations, and medical emergencies are a handful of such occurrences. There are some ways to mitigate the effects of these situations, but there are other mistakes which can prove detrimental to retirement security.
Here’s a look at some pitfalls which can put a retirement plan on the line – and which we recommend you take measures to avoid. Read More
