Guaranteed Retirement Income Strategies

I want to talk about guaranteed retirement income strategies. And before we talk about that, let’s first set the stage when we talk about retirement income. You know we do have a process we want to figure out, kind of get into that what we call shortfall to solve for. So first we have some action steps that we want to do. One, what is our retirement income needs? We have to do a budget, right? What do we need to live on to do the things we want to, pay the bills and enjoy our retirement? So let’s set that budget. That’s step one. We need to then at that point, once we have that budget, talk to a Retirement Planning Specialist. You know have this person work with them, working out this plan. Look at our investments that we have together. Now that we have this budget, what are the income needs that we have? What is our tax situation? All these other things, so we’ll map out this roadmap. Consider the investments, right? So as we’re planning this out, the investments are a piece of that. How are we going to structure those investments to fill the income to provide this income? Right now, we’re fortunate to where we have higher interest rates that are out there. We need to leverage those. Take advantage of those while we can. Whether that’s simply with just savings accounts or other types of accounts that I’m going to be talking about in a minute. With this season we need to be able to take advantage of these higher rates. We need to act now. If you’re retiring soon, these action steps are stuff that we can’t put off any longer and time is of the essence. And the more we have time to plan, we feel the higher the chances of success and also the greater confidence you’re going to have heading into retirement. Also, when we build this plan out, actions steps could be maximizing Social Security payments. Again, Social Security when we take that will determine about the amount of money we’re going to be getting per payment, right? The longer you defer your Social Security, the greater the monthly payment will be. You can take it as early as 62 for early benefits and you can delay it as long as until age of 70. That money is going to increase over time depending upon your full retirement age and all that sort of stuff and different factors. So again, we want to look at when should we be taking Social Security? Not only from a longevity perspective and that’s something that none of us know exactly. But maybe you’ll be able to provide some family history and lifestyle stuff that can help us lead us there. But just from a general financial planning and how does that fit into play? Manager expenses again from an action step. You know getting into retirement and we’re talking about the budget and what is that sort of stuff? You know we need to manage those expenses and be realistic about that. You know likely you’re not going to go from living this lavish lifestyle while you’re working and all of a sudden cut that way down to nothing just to retire. You’re going to want to have some lifestyle during retirement, right? And that lifestyle is going to be your income. Your income is going to provide that lifestyle. So back to the original point, guaranteed retirement income. So how do we get guaranteed retirement income? Well Social Security in theory is guaranteed retirement income. One option though from an investment perspective is the use of annuities. Now annuities may or may not be for you. And there’s different types of them so we have to be careful with them. Annuities are through insurance companies and are claims based on the insurance company and that’s who’s guaranteed the product. So you want to be very careful about the companies we’re using and the types of annuities we’re using and also the structure of that. Because they offer different benefits of that. So some annuities offer additional benefits that give you guaranteed lifetime income path over a certain time period or a lifetime. And that may be attractive for people especially with the recent market volatility. And if you’ve had stocks or bonds you may be seeing portfolio fluctuations. And if you could have a guaranteed stream of income, that may be attractive. Again, it’s not for everybody, but again it’s an option that sometimes is worth exploring, Earlier I talked about taking advantage or maximizing interest rates, right? So with interest rates being really decent now for the first time in many years, some of these products have some attractive payouts over time. So once again the point of this is those action steps that I provided before as you’re kind of planning it out and then consider some of these guaranteed income streams that are out. Again, make sure that you do your research and talk with a professional in these insurance products that are out there.