Provided by Pam Prine

A key step in planning for retirement is to put strategies in place that maximize guaranteed income. Annuities can be an integral part of your long-term retirement planning strategy, if you understand how to overcome unnecessary risks and put in place important optional benefits that help protect your financial future. Annuities offer guaranteed death benefits and payment options to help your retirement income needs.

Why Guaranteed Lifetime Income is Important

The fact is Americans are living longer. There has been a significant increase in the life expectancy of 65-year-olds over the past quarter century. Today, the average life expectancy for a 65-year-old male is 84 and female is 86.51. This compares with 81 and 84 years respectively in 20022. While an increase of three or five years may not seem dramatic over a lifetime, it can have a significant impact on retirement security. Additionally, health care costs continue to rise. For the average 65-year-old, health care costs will be $280,000 over their retirement, further necessitating the need for lifetime income.3

Using guaranteed income sources to meet essential expenses helps address the issue of living longer. Furthermore, these income sources provide some assurance that you can cover basic needs such as housing, health care and food for as long as you live. The remainder of your assets can then be directed to investments with more growth potential to help protect against inflation, rising health care costs and market volatility. Consider these sources of guaranteed income:

  • Pension Plans – Many pre-retirees with poorly funded 401(k)s wish they had a traditional pension. But few workers still have access to a retirement plan that will provide guaranteed payments for the rest of their lives.
  • Social Security – Many retirees receive the largest portion of their guaranteed income from Social Security. Most people begin claiming Social Security at the earliest eligible age, 62, before reaching full retirement age. 4 However, if your clients can hold off on claiming benefits, the difference may be significant. Clients can increase Social Security retirement benefits by 25% or more by accumulating delayed retirement credits up until age 70. 4
  • Annuities – Unless you have enough guaranteed pension and Social Security benefits to cover all your basic expenses, you most likely will need to supplement your retirement income with savings.

Other investments generally don’t provide a guaranteed lifetime income. An annuity can turn assets into a steady, guaranteed* income stream. This means that no matter how long you live, you can always depend on this source of income.

A key step in planning for your retirement is to put strategies in place that help maximize your guaranteed income. 

*Guarantees based on the claims-paying ability of the issuing company.

Pam Prine may be reached at (623) 299-9710 or pam@keystonegroupaz.com www.keystonegroupaz.com

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Securities offered through J.W. Cole Financial, Inc. Member FINRA/SIPC. Advisory services through J.W. Cole Advisors, Inc. (“JWCA”). Keystone Capital Management Group, LLC and JWC/JWCA are unaffiliated entities.   

Citations

  1. https://www.ssa.gov/planners/lifeexpectancy.html
  2. https://www.cdc.gov/nchs/data/hus/2017/014.pdf
  3. http://money.com/money/5246882/heres-how-much-the-average-couple-will-spend-on-health-care-costs-in-retirement/
  4. https://www.ssa.gov/planners/retire/delayret.html

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