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Are You Generating Enough Income in Retirement?

Are You Generating Enough Income in Retirement

Do you have a dependable level of income for retirement? According to a new study, many seniors aren’t generating the retirement income they need. BankRate.com reports seniors in 47 states and the District of Columbia aren’t replacing enough of the income they earned in their working years.

The study found that at best, seniors are living off 60% of the income they had in their pre-retirement years. Financial experts believe retirees need at least 70% of their pre-retirement income. BankRate.com reports the national average to be 60.27%.

Why Does It Matter?

Of course there is more than one way to build a nest egg, including savings. That’s certainly good news, given the study findings. According to BankRate.com, much of the income shortfall can be attributed to a lack of savings among seniors.

Notably, if seniors have a shortfall in retirement income, there are other strategies which experts recommend:

• Working longer
• Delaying Social Security claiming until full retirement age or later
• Getting rid of debt
• Cutting back on spending levels
• Moving to an area with lower cost-of-living

However, not all of these “delay” or “reduction” strategies will be options for everyone. It does underscore the importance of making proper retirement decisions. For income planning purposes, a critical juncture lies in the 10 years before people retire and 10 years into their retirement. Retirement decisions made in this period can have a critical impact on the rest of someone’s retirement lifetime.

Financial Security with Guaranteed Income

Another strategy to consider is use of annuities. They can be used to generate a guaranteed income stream for as long as someone lives. Annuities are increasingly being used to supplement income from Social Security, pensions, and other sources.

What about people with healthy life savings? Annuities could be used to cover certain monthly expenses such as living costs. This could free up other sources of income and offer seniors greater financial flexibility.

Avoid the Alternatives

Without a set plan, a few undesirable outcomes could arise. Retirement money could be spent too quickly, seniors could outlive their retirement assets, or there may be unnecessary cutbacks in retirees’ standard of living. When used properly, annuities allow retirees and pre-retirees to avoid these possibilities.

There are many different types of annuities, and each comes with different features and benefits. Suitability depends on a number of variables, including personal circumstances, needs, and objectives. If you are interested in seeing an annuity may be a good addition to your retirement income strategy, we would be glad to help you.

Use our Find a Licensed Advisor section to connect directly with an independent financial professional, and to request a personal strategy session to discuss your needs and goals. And should you have any questions or concerns, call 877.476.9723.

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