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.
There are many kinds of financial professionals that are available today. With no shortage to choose from, why would you want to limit your search only to retirement income planners – or those who plan for retirement income?
The simple answer is life changes, and financial wellness at this point requires a certain specialty. You wouldn’t go to a family medicine doctor for matters relating to brain surgery. That is what a neurosurgeon is for.
The same goes for income planning near and in retirement. An experienced retirement income planner will be able to help you maximize the fruits of your life’s work net of taxes, inflation, fees, and other factors. They should be able to create dependable income streams that have a good chance of holding up for however long your retirement lasts.
Retirement planning covers lots of areas. But have you heard of a situation where someone with $500k – $600k in retirement savings might be ‘richer’ than someone who has $1 million? Economic paradoxes like this and other insights are discussed in a new film, ‘The Baby Boomer Dilemma.’
You may have heard of The Baby Boomer Dilemma documentary, which takes a close look at the retirement landscape in America and how it’s being funded. The movie centers around the fictional story of a Florida couple, who have concerns about their future financial security.
An 85-min film, The Baby Boomer Dilemma ends with the wife distraught about not having a guaranteed source of income for their retirement, whether a pension or an annuity. Here’s a little bit more information about the film’s content. If you have any questions about the movie or would like to request a personal retirement consultant based on the movie’s principles, please fill out the contact form for more information.
Retirees today face a host of financial challenges that previous generations didn’t. The exit of guaranteed pensions from the private sector, coupled with increasing lifespans, has left many older Americans scrambling to make ends meet.
Not only that, there is often the need to start providing care for elderly parents or other relatives who have become unable to perform one or more of the activities of daily living (ADLs).
Paying to have this type of support professionally can be a financial burden for those who don’t have any insurance to cover them. But providing the care yourself can be equally burdensome in other respects.
Nationwide Retirement Institute conducted a comprehensive survey on caregiving and how it affects the lives of the caregivers. The survey researchers looked at those who were in the middle of their careers. These folks are commonly referred to Gen Xers or the sandwich generation.
The survey was designed to find out how they fared in retirement when also dealing with the challenge of caregiving for loved ones. Read More
Editor’s Note: This article is the second feature in a two-part series on the top financial crises in U.S. economic history.
From reading the first recap of the Top 10 Financial Crises in History (Crises 6 through 10), you may have noticed that certain patterns emerge.
Sometimes we have an overblown sense of optimism, even in the face of empirical evidence to the contrary. At times, it has led our country into a number of financial crises. And while these crises have proven to be more exception than norm, they are yet another reminder of how we just can’t put off personal financial planning.
Not only that, history repeating itself shows that every investor is responsible for protecting their own financial future. With the days of employer-backed pensions fading away, Americans are more responsible for their personal financial security than before.
Having all that in mind, here are five more historical market events which remind us that bad things happen to good investors. Read More
Editor’s Note: This is Part 1 of a series on the worst financial crisies in U.S. economic history. Stay tuned for Part 2 coming up in a short time!
When the economy is tooling along and we find ourselves facing only an occasional hiccup in our money matters that falls short of expectations, it’s easy to feel complacent about the future. Surely life tomorrow will be a lot like it was today.
Except, as anyone who owned a home, a retirement account, or an investment account in 2008 knows all too painfully, our situations can change in a ‘heartbeat.’ And, in turn, they can affect our future outlooks.
To make sure we are all diligent about protecting our financial futures so that we can achieve the retirement we envision, here are 10 valuable reminders.
These historical lessons reinforce the importance of having a financial plan – so you can trudge on ahead or reset your course as needed. They aren’t necessarily typical of what might happen in our lifetimes, but they do show the value in being financially prepared.
As you think about the future, consider working with an experienced financial professional, who acts in your best interest, and who can help you make any such determinations. That includes the whens and ifs of any changes that might be right for you. And keep an eye out for part 2 of our series, coming next week. Read More
Woulda. Coulda. Shoulda.
That is how a surprising number of retirees feel about their tax planning. In a recent study by Nationwide Retirement Institute, staggering proportions of retired Americans wished they had done more to prepare for their sometimes-surprising tax bills.
Over the course of the “Retirement Income and Tax Planning Consumer Survey,” researchers asked people in different life stages about their preparedness for paying taxes in retirement.
The survey was revealing. An estimated 60% of future retirees, 70% of recent retirees, and 75% of those retired for more than 10 years said they are only “somewhat knowledgeable” or “not at all knowledgeable” about tax planning in retirement.
That’s right. Three of every four people retired for at least a decade still admit to feeling less than certain about planning for taxes in retirement. Read More
You may not realize it, but Uncle Sam becomes your partner in your retirement.
Back in 2010, Lincoln Financial Group sponsored a survey of affluent retirees that shows how big of an effect taxes may have. The survey gathered data from people ages 62 through 75 with annual household incomes greater than $100,000.
Of all retirement spending areas, the study found that federal income taxes were the retirees’ largest expense. “They are greater than many individuals planned for prior to retirement—and a growing source of concern,” the survey reported.
If you don’t want everyone’s least favorite uncle to be the “majority owner” of your retirement income, it’s important to take steps to maximize the tax efficiency of your retirement income plan. Read More
If you think choosing when to start claiming Social Security benefits can be confusing, you’re right. But did you know there is even more to consider when deciding when to start collecting those benefits?
If you are approaching or planning for retirement, you need a Medicare enrollment strategy that synchronizes with your Social Security claiming strategy in order to:
- Reduce your risk of losing benefits,
- Prevent you from incurring penalties, and
- Maximize your benefits from both programs for the rest of your life.
Medicare and Social Security are programs that “talk to each other.” Missed deadlines or poorly-timed benefit claims could mean as much as thousands of dollars of lost income.
What we don’t know can hurt us. So, here’s a quick look at why you must verify deadlines and information for each program so everything is done right. Read More
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