Retirement Planning Blog

Volatility Buffer: Reduce Investing Risk in Retirement


As you near retirement, it’s typically more important to protect what you have than it is to reap financial gains. A ‘volatility buffer’ strategy can help especially when in the retirement red zone, or that point of 10 years before and 10 years into being retired.

If someone is within that timespan, then a major financial loss can seriously derail their retirement goals. For instance, many people were ready to retire in 2008, but they were forced to work for another ten years or so in order to make up for investment losses suffered in the financial crisis.

But what is a volatility buffer, and how does it work? In simple terms, a volatility buffer is a way to reduce investment loss risk in your financial plan. It can help you keep financially on track in times of unsavory market conditions, including when you are taking withdrawals from your asset holdings for retirement income.

You have a variety of options that you could use in a volatility buffer strategy. One way that you can guard against this heavy cost of investment loss risk is with a fixed index annuity. This type of annuity has a feature of protection in the volatility of the markets while keeping your money safe from losses. Of course, this is just one option among others.

In this article, we will go over what a volatility buffer is, how to include a volatility buffer strategy in your overall plan, the pros and cons of this strategy, and how to tell if it’s a good fit for your financial situation.

Read More

Aging in Place: a Guide to Living Well in Retirement


The term “aging in place” refers to how retirees wish to remain in their homes for their entire retirement, however long it may last. Aging in place is a growing trend and increasingly important for millions of Americans.

On the other hand, it’s also a hard goal to achieve. One major moving target in retirement is how our health needs evolve as we age. These changes can be especially impactful if we move into health situations requiring assisted living or other long-term care support.

According to a U.S. News & World Report survey, 9 in 10 adults aged 55 and up said it’s an important goal for them to be able to receive this care in their own homes, where they are comfortable and familiar, if at all possible. In this article, we will discuss aging in place and some other things to keep in mind, including:

  • What you should know about it,
  • Ways to create a sustainable plan that can make it possible, and
  • Potential pitfalls for planning for aging in place.

Read More

Spotlight Series Expert Interview – Kim O’Brien, FACC

Find planning for retirement a little daunting — and perhaps frustrating? To help boil things down, we are bringing experts from all corners of the retirement and insurance spaces to give you high-level insights for your financial confidence and security. In this Spotlight Series interview, Kim O’Brien, Chief Executive Officer of the Federation of Americans for Consumer Choice (FACC), joins us to talk about retirement trends, annuities, life insurance, long-term care, and evolving regulations affecting insurance products.

This is a wide-ranging interview talking about all of the choices available to you, past and upcoming innovations in the annuity and insurance markets, how satisfied that annuity and insurance customers truly are with their policies, how you can build a truly well-diversified plan to handle today’s hard-to-predict risks, and much more!

Read More

Does an Annuity Bonus Make Sense for You?


You may have heard of an “annuity bonus” if you have ever looked at annuities before. Bonuses are just one annuity feature, but are they warranted? Are these annuity bonuses a good thing in general, or are they more of a good fit in certain situations?

In this article, we will go over the basics of an annuity bonus, what it involves, what situations in which you might consider one, and the pros and cons of an annuity bonus. In general, annuities that come with a bonus are called “bonus annuities.”

Read More

The Rule of 108: How Long Does It Take for Taxable Investments to Double?


You can use some simple formulas to calculate how much a given investment might grow over time, such as the Rule of 72. This rule can show you how long it will take for your money to double at a certain rate of return, but it also assumes the growth isn’t taxed.

What about estimating how long it will take for an investment to grow but when the growth is taxable? This is where simple calculations such as the Rule of 108 can come in handy. The Rule of 108 is similar to the Rule of 72 insofar as it lets you see how quickly your taxable investment might double in value. It also assumes a federal income tax rate of 32% that applies to the growth annually.

In this article, we will go more over the Rule of 108, how to use it to get an idea of how it long it would take for your taxable money to grow, some pros and cons, and how you can get the most out of it.

Read More

How to Roll Over an IRA or 401(k) to an Annuity


If you are like millions of other workers in America, you have probably saved for retirement in an IRA, a 401(k) plan, or another tax-deferred account. The chances are also high that you worry about running out of money in retirement. Fortunately, you can put some of that fear to rest by having an annuity as part of your overall retirement strategy. Annuities are fundamentally unique savings vehicles because they can pay you a guaranteed, set stream of income that will last as long as you do.

Annuities can supplement your Social Security payments by providing additional guaranteed income that will remain steady regardless of how the markets perform. They can also help ensure that you have enough money coming in every month to cover all your living expenses.

In this article, we will go over more of the steps of how to roll over an IRA or 401(k) into an annuity. None of the steps are especially complex, but they must be done properly to ensure no tax consequences from the rollover (unless you are converting your annuity to a Roth account). To start off, let’s talk more about why someone might want to move some of their retirement money into an annuity.

Read More

What Is Long-Term Care? Breaking Down the Basics for Retirement Planning


Chances are you have heard of long-term care, but how does it come into play in retirement? What are the chances that you will need long-term care? How much will it cost? It’s important to consider these questions as you think about how you will manage healthcare expenses in retirement.

If your goal is to have a financially secure lifestyle, then you may want to treat the odds of you (or your spouse) needing long-term care as a fact. As we will see later on, the odds of some long-term care needs go up as people progress in their retirement years. This possibility can derail even the best-laid retirement plan if it isn’t adequately accounted for in retirement income planning projections. Nor will Medicare pay for many long-term care services and supports, as is often believed.

In this article, we will go over the basics of long-term care, how much it can cost you, and some strategies that can give some financial relief so that long-term care doesn’t drain your retirement savings.

Read More

How Does the Rule of 72 Work?


Whether you already have a retirement nest egg or are considering an investment, the Rule of 72 can give you some idea of how fast your money will grow over time. Many financial advisors use this rule to help their clients understand the returns that they may get from a certain investment.

If you are looking for a quick, practical way to see how long it can take for your money to double, the Rule of 72 is highly useful. However, just as with other rules of thumb in finance, it’s only a back-of-envelope formula.

There are some limits to the Rule of 72, and it also assumes that you will get a certain average rate of return each year. Of course, financial markets don’t work that way, so any investment won’t have the same growth rate each year. For those near or in retirement, there is also the potential hazard of sequence of returns risk having an impact on how much money they might have for lifelong retirement income.

In this article, we will go over what the Rule of 72 is, how it works, and how you can put it to good use in your retirement planning and investments in general.

Read More

Exploring the Rule of 85: It’s Role & Impact


If your employer offers a guaranteed pension plan, then you may wonder whether it’s possible for you to retire early and still get your full pension benefits. Many pension plans follow the Rule of 85, which says that if your age and years of service to your employer total at least 85, then you can retire early without giving up any of your pension benefits.

This calculation is by no means universal. That being said, it’s probably among the most common formulas you will find in the pension arena today. In this article, we will go over the Rule of 85, how it works, what its limits are, and how you can use it in your retirement planning for income and other financial goals.

Read More

What Is IRMAA? (How Your Income Affects Your Medicare Premiums in Retirement)


When planning for healthcare in retirement, you may have come across the Medicare “Income-Related Monthly Adjusted Amount,” or “IRMAA” for short. It’s a fancy way of referring to the extra monthly premium amounts that you might pay on your Medicare Part B and Part D coverages.

Those extra monthly premium amounts are basically “surcharges” on your Medicare premiums, and they can apply to those with Standard Medicare and Medicare Advantage plans. Whether IRMAA applies to you and other Medicare beneficiaries is determined by your modified adjusted gross income (MAGI) from two prior tax years.

While you obviously want to maximize your income in retirement, in some cases this can lead to those additional surcharges on your Medicare coverage. If your income exceeds a certain amount each year, then you may have to pay the monthly adjustment amount on top of any taxes that you owe.

This surcharge is also in addition to the monthly premiums that you will pay for Medicare Parts B and D, which cover doctor visits and prescription drug coverage. IRMAA can raise the cost of Medicare by hundreds or even thousands of dollars per year for those whose incomes are high enough.

It’s a big but little-known issue, to say the least. In this article, we will go over the basics of IRMAA, how it works with Medicare and retirement in general, and some possible strategies that can help keep them and other healthcare costs at bay.

Read More

Next Steps to Consider

  • Start a Conversation About Your Retirement What-Ifs

    retirement planning services next steps

    Start a Conversation About Your Retirement What-Ifs

    Already working with someone or thinking about getting help? Ask us about what is on your mind. Learn More

  • What Independent Guidance
    Does for You

    independent vs captive advice

    What Independent Guidance
    Does for You

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

  • Stories from Others
    Just Like You

    safe money working with us

    Stories from Others
    Just Like You

    Hear from others who had financial challenges, were looking for answers, and how we helped them find solutions. Learn More

Proud Member