WEALTH ACCUMULATION AND INCOME YOU WON’T OUTLIVE

This week’s article speaks about the emergence of Fixed Indexed Annuities (FIAs) “as a top choice for soon-to-be retirees due to their potential for wealth accumulation.” We have spoken in the past about the option of using FIAs for income that you won’t outlive. This article draws our attention to an additional consideration. Call us when you have a moment so that we can tell you our thoughts on how this fits into your retirement strategy. We look forward to hearing from you.

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THOSE WHO PLAN

Did you know that “those who plan are estimated to save more than 3x those who don’t”? This week’s article reminds us of this. We’ve always thought that budgeting was important, especially when planning for retirement. You should also remember to take into account that your expenses may increase. Even if some expenses disappear, there are others that can either replace them or change. The inability to predict with absolute certainty how much money we need during our retirement years can be frustrating, but that is what we are here to help you maneuver through. Call us, we look forward to speaking with you soon.

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GUIDANCE

Over a year ago I read an article that appeared on the US Treasury Department’s website that stated “In order to help retirees manage their savings and ensure they have a stream of regular income throughout retirement, the U.S. Department of the Treasury and the Internal Revenue Service issued guidance today designed to expand the use of income annuities in 401(k) plans.” As you begin your 2016 retirement planning, that guidance notice may be of interest to you. After you have had a chance to read it, call us if you have any questions. We’re always here to help.

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THINKING TOWARD THE FUTURE

As we close out 2015, it seems appropriate to reflect on the past year and plan for the future. A comment in this week’s article caught my attention as it seemed to do both. ”Fixed-index annuities, a type of annuity that benefits from market gains, have become more popular in recent years as investors wary of stocks sought more stable options.” We are here to help you with options that offer continued stability as we enter this New Year. Happy Holidays.

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GUARANTEES OR DREAMS AND HOPES?

Many of us think of our 401K or IRA account as the source of our retirement income. The question is, how much income will it provide? Regardless of the amount of money we have saved, it is difficult to determine the exact amount of income we will obtain from it, in part because the principle we are earning money off of may go up or down depending on the market, and it can do so month to month, and year to year. Not knowing what we can count on makes it even more difficult to plan for retirement. That is why I thought to share with you this week’s article. The author was very direct when he wrote “Unlike a pension, annuity income is not an obligation of the employer, but of the insurance company. Unlike investments, annuity income is based on guarantees and not dreams and hopes.” Call us if you’d like to understand whether what you have set aside as your retirement fund is based on “guarantees” or “dreams and hopes”. We’re always here to help.

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GIVING

This week’s article on the topic of Giving reminds us that at this time of year when we think about what gift to give to our loves ones “ it’s worthwhile to take some time and consider whether the family members and friends who are beginning to prepare for retirement are adequately prepared to step away from their jobs but continue to have financial security.” It’s never too late to think about retirement options, nor is it ever too late to take steps that can help you prepare for it. By way of example, the article suggests things we can do “between the turkey, eggnog and caroling”. Call us to discuss suggestions we have that may help you and your loved ones in planning for retirement. We are always here to help.

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WILL YOU BE DRAWING DOWN ON ASSETS IN RETIREMENT?

This week’s article was interesting to me because it said that “buying an annuity that generates lifetime income could very well be a good move [for retirees] as a variety of studies show that guaranteed income often makes for a happier retirement. Not surprisingly, people seem to enjoy their post-career lives more knowing that they’ll have income they can count on no matter how long they live and regardless of the ups and downs of the financial markets.” I was also interested in the analogy the author made to social security saying that ”social security is itself a type of annuity, indeed, one designed to automatically boost its payments each year to keep pace with inflation (although if the inflation benchmark used by Social Security doesn’t rise, neither will payments, witness the fact that Social Security recipients won’t receive a cost-of-living increase in 2016).” Interesting way to think about it. Call us if you are in the process of trying to determine what your retirement income will be, and if you will be drawing down on assets to fund it. We’re always here to help.

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BACK TO BASICS

Sometimes it is important to go back and review the basics. I thought to refer you to this week’s article because I think it does a good job of highlighting some basic information about annuities. It talks about two categories of annuities, Fixed and Variable. The article states that a Fixed has a “Guaranteed minimum rate of return that never varies regardless of market swing. Insurance company assumes the risk; while a Variable has a “Variable rate of return depending on the stock, bond or money market investment. Consumer assumes the risk.” Call us once you’ve read the article and let us know if you have any questions. We’re happy to help you obtain all of the information you need to make the best decision for you and your family.

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DO YOU KNOW THE DIFFERENCE?

I wanted to share with you an article that explained the differences between an annuity and life insurance. I liked not only the explanation, which I found simple and straightforward, but also the chart in the article that provided me with information relating to questions that are often asked by potential purchasers of one or the other product. “Both annuities and life insurance should be considered in your long-term financial plan. While both include death benefits, you buy life insurance in the event you die too soon and an annuity in case you live too long. In other words, life insurance provides economic protection to your loved ones if you die before your financial obligations to them are met, while annuities guard against outliving your assets.” Call us if you want to discuss either of these situations, we are here to help.

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RETIREMENT INCOME OPTIONS FOR WORKING FAMILIES

I came across a press release issued by the U.S. Department of the Treasury a little less than a year ago, and thought to share it with you.  J. Mark Iwry, Senior Advisor to the Secretary of the Treasury and Deputy Assistant Secretary for Retirement and Health Policy was quoted as saying “As boomers approach retirement and life expectancies increase, income annuities can be an important planning tool for a secure retirement” and “Treasury is working to expand the availability of retirement income options for working families.  By encouraging the use of income annuities, today’s guidance can help retirees protect themselves from outliving their savings.”  Call us if you would like to discuss what retirement income options may be available to you. We’re here to help.

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