Retirement Planning Blog

Fixed Annuity vs. CD — How Do They Compare?

Fixed Annuity vs. CD -- How Do They Compare?

If you are looking for a decent rate for your money, your local bank might not offer much to write home about. We already are in a low-interest rate environment, and the Fed doesn’t appear to be ready to raise rates anytime soon.

This is, of course, one of the effects of recent public health and economic conditions, which also might not be winding down anytime soon.

When it comes to earning interest, one option that banks offer is a certificate of deposit. Read More

How Have Investors Responded to the Covid-19 Pandemic?

How Have Investors Responded to the Covid-19 Pandemic?

There is no doubt that the pandemic has broad public health and economic impacts for millions of people.

From employment taking a hit and emergency funds being tapped to working-age and retirement-age households pivoting financially to deal with the unexpected, the effects have been widely felt.  

While a lot has happened in 2020, many people actually expected some sort of reversal in financial markets and economic conditions back in 2019, a survey found earlier this year.

According to Spectrem Group, an investor research firm, one of the biggest fears for investors in 2019 was a market downturn and ensuing economic downturn. While this didn’t happen then, the novel coronavirus pandemic brought it about in 2020.

A record-breaking market downturn and economy shutdown sparked fears of a recession. Since then, markets have recovered.

But investors continue to worry about the long-term effects of the recession that has hit the United States and other parts of the globe. Read More

How Can the Timing of Your Retirement Withdrawals Affect Your Income?

How Can the Timing of Your Retirement Withdrawals Affect Your Income?

Sequence risk is the risk that you will take a big loss early on in the life of an investment portfolio. It’s already bad when you have investment losses at the early start of your retirement. It’s equally bad when you take losses just before you retire.

But if you are retired and taking withdrawals when the portfolio losses happen, the impact of those losses is compounded. By taking a withdrawal, you are already drawing down the balance of money in your portfolio from what it was prior.

If your portfolio also sustains a loss at the same time, the effects of both will come together to affect you. You will not only have to eat the loss, but you will further deplete the balance in your portfolio. So the timing of your withdrawals matters, especially in relation to how your portfolio performs. Read More

What Retirement Expenses Are You Most Likely to Face?

What Retirement Expenses Are You Most Likely to Face?

When planning for retirement income, the devil is in the details. Once you are retired, you want to be sure that you have more than enough income for your lifestyle expectations.

One way to get a good grip on this is by mapping and estimating what you expect your future spending to be.

This can give you a high-level perspective of how much income you will need for your idea of a comfortable retirement. Everyone has a different situation. Because of that, the amount of annual income that you will need will likely differ from others.

That being said, you can still have more clarity in your income planning and decisions by seeing what others’ financial experiences are in retirement. One helpful metric in this regard is understanding which expenses can dominate your retirement spending.

Here are four expenses that can take a bundle out of your retirement money if you don’t plan for them. Having strategies for these costs, and your overall expenses, can go a long way toward keeping your retirement goals on track. Read More

What Are the Risks of Annuities?

What Are the Risks of Annuities?

Annuities can help strengthen your overall retirement strategy with their unique guarantees.

From lifetime income to growth or protection, their contractual guarantees can help in many areas. But just like with any other instrument, annuities also have risks of their own.

What are these risks of annuities? What should you keep in mind as you consider an annuity contract for your retirement?

Here’s a quick rundown of different risks of annuities and some other information that can help with your decision-making. Read More

Annuitization: Should You Annuitize an Annuity?

Annuitization: Should You Annuitize an Annuity?

Annuities are becoming an increasingly popular retirement savings vehicle for people in the U.S. Many folks are seeking alternative instruments that can guarantee them a stream of income for life.

With corporate pensions gradually disappearing from the financial marketplace, annuities have emerged as a viable substitute for these bygone streams of income.

Most annuity contracts today come with a variety of benefits and features that were unheard of a generation ago. Living and death benefit riders, guaranteed income riders, and disability and long-term care riders are now commonly available in many annuity products.

However, in order to take advantage of many of these benefits, the annuitant will have to give the insurance company permission to annuitize their contract.

Annuitization is a one-time, irreversible event that ends the accumulation phase of the annuity, where money was being put into the contract or a lump sum of money was left to grow on its own. Annuitization marks the start of the payout phase of the annuity.

Read More

Ways to Increase Your Social Security Benefits

Ways to Increase Your Social Security Benefits

Editor’s note: The following post has been contributed by Andy Masaki. Andy is a blogger and financial writer associated with the Oak View Law Group. He is a debt expert and a member of several online forums, where he shares his advice as well as tips to lead a financially independent life.

Everyone wants a comfortable retirement to relax during their golden years. But a recent report by Barron’s revealed that most of the retirees are stressed about their income in retirement.

In our country, Social Security payments are one of the major sources of income for most retirees. In 2020, you can receive up to $3,790 per month as your Social Security benefits. But the fact is, many people don’t receive that much. According to the Social Security Administration, the average check is around $1,390.12.

So, what can you do to maximize your Social Security payments?

Here are some of the best possible tips to increase your Social Security benefits so that you can relax during your golden years. Let’s start. Read More

What Should I Do with My Annuity at Maturity?

What Should I Do with My Annuity at Maturity?

From variable to fixed annuities, millions of people buy annuity contracts for many reasons. These purposes range from lifetime income to asset protection and tax-advantaged growth. As a contract, each annuity has a different time period that it takes to mature.

Depending on what you buy, your annuity may have a maturity period that goes only for a few years. If your annuity has more benefits or the benefits are guaranteed for a longer time, its maturity period can be as long as 15 years.

But what about when you are on the backend? What should you do with your annuity at maturity? Annuity owners have a variety of options when they reach that point.

Depending on your age, financial situation, and the goals that you have for your annuity money, you can do the following when the contract ends:

  • Keep your money in the contract and withdraw it at strategic times (or a certain withdrawal schedule),
  • Cash it out in a lump-sum balance,
  • Renew your contract,
  • Annuitize your contract into an irreversible income stream, or
  • Transfer the money into a new annuity contract.

Let’s go into more details about what you can do when your annuity contract matures. Read More

How Does an Indexed Annuity Differ from a Fixed Annuity?

How Does an Indexed Annuity Differ from a Fixed Annuity?

There are many different types of annuities available in the financial marketplace today. Two of the more popular types of annuities are fixed annuities and indexed annuities. Indexed annuities are also known as fixed index annuities nowadays.

Both kinds of annuities can have their place in a retirement financial plan. But there are key differences between a fixed and an indexed annuity that people should understand in order to make an informed decision when choosing which type to use.

Before we delve into the differences between fixed and indexed annuities, it’s good to know the ways in which they are similar. Read More

Post-Retirement Planning Doesn’t Stop When You Retire

Post-Retirement Planning Doesn't Stop When You Retire

Financial planning for retirement, or “post-retirement planning,” doesn’t end once you retire. Even if you have accumulated enough money for a secure retirement, your plan will require ongoing checkups to confirm that everything is going smoothly.

You will have to continue to make changes and adjust your plan as time goes on. Retirement can last as long as one-third of someone’s lifetime, as medicine, wellness, and technology have seen tremendous progress in recent decades.

In other words, having an ongoing plan for this phase of life is quite crucial. You may also experience more changes in retirement than you have previously, as your abilities and health evolve over time.

Your retirement planning strategies will need to be reviewed and updated on an ongoing basis. Conducting annual reviews of your financial plan, at a minimum, and making changes as necessary is a solid course of action. 

Here are some ‘moving targets’ that are likely to change in your retirement years. Read More

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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