How Much Do You Need To Retire?

It is amazing how many people share a single vision of the perfect post-career lifestyle: waking up late, playing golf or tennis, enjoying a nice lunch, and spending the afternoon in much the same way.

Guess what? It’s probably not in your future. Why? Well, even if you work long and hard enough to afford it, you will almost certainly be bored by leisure. (I know you don’'t believe me, but I can show you plenty of evidence: testimonials by dozens of businessmen I’'ve known who retired, found themselves bored, and went back to work.)

Maybe you will be the exception. Maybe you can walk away from a lifetime of creative, challenging work and be happy to idle away the rest of your life.

Which brings me to the question of money: the second big reason your retirement will probably be different than you imagine.

Living the Fantasy Lifestyle Is Expensive

Even if you find a relatively cheap place to do it in, playing golf or tennis all day and dining at fine restaurants costs a lot of money. And the mandatory first-class travel? As they say in Little Italy, “Fahgedaboutit.”

That kind of living will cost you approximately a quarter million dollars a year.

What Would It Take to Have That Kind of Money?

Let’s see what kind of retirement nest egg you will need to fund a quarter-million-dollar retirement lifestyle.

Assuming your retirement fund can earn 9% a year (which is about equal to the long-term stock market return), you’'d need $2.8 million.

If you go for a safer yield, let’s say US Treasuries, your retirement fund would have to be about $4.2 million.

And that'’s liquid. I’'m not counting the value of your house, your furniture, your collectibles, etc. Since you can’'t earn income from those “illiquid” investments, you can’'t really count on them for your retirement planning.

To have $2.8 million to $4.2 million liquid, you would probably need to acquire a net worth of about twice that, all other things being equal.

Not too many people are worth between $5 million and $10 million when they retire. Yet many, many fantasize about a retirement lifestyle that requires that kind of net worth.

If Your Current Financial Situation Is Meager, Don’'t Despair

Accumulating wealth is just another goal...like learning to ski or play the piano. It will take you time (1,000 hours to become competent at it and 5,000 hours to master it), but you can definitely do it. And I'’ll be happy to help you along the way.

In the meantime, there are ways to bring the target a little closer. The best way, by far, is to find a retirement paradise that is less expensive than the USA. If you can enjoy living in some other part of the world, you can definitely get that great retirement lifestyle for a lot less money.

The Good News Is This: There Are Places Where Living Well Doesn'’t Cost As Much Money

Top Ten List

Why retiring outside the U.S. is appealing.

#10) The people are friendly, engaging and emotionally reachable, less pretentious.

#9) There are new celebrations and festivals constantly. Every day is an adventure.

#8) There are plenty of volunteer opportunities and your expertise is both needed and valued.

#7) The weather is better than back home.

#6) You can afford a gardener, a maid and a cook. In your "old life" this was out of your financial reach.

#5) You might not need a car. #4) The cost of living is better than at home and quality of life is higher.  #3)  The healthcare is better, easier to access and more affordable.   #2)  You won't have to work through your Golden Years.

#1)  More freedom, more choice, less government regulation, less taxes.

My personal favorite is Panama. My goal is to have a winter residence there. Living abroad is definitely worth looking into and there are many resources to help you in determing what the best situation is for you.$


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3 Easy Ways to Save More for Retirement

Investing for retirement is difficult…

Keeping a constant eye on the markets, studying economics, staying on top of every trend without a misstep… that’s time-consuming and confusing.

Worse, the 401(k) system is broken: Lack of guidance, poor websites, and limited investment options make most individuals’ first foray into investing confusing.

But you can’t hide from it. No one is going to rescue your retirement for you.

The good news is it doesn’t have to be so tough. As you’ll see below, there are just three keys to understanding 401(k)s. Learn these and you will truly change the quality of life in your retirement…

Let’s get started…

There are only three things you need to think about to earn an extra six figures in your retirement plan…

1. Asset Allocation
2. Low Fees
3. Index Funds

Let’s quickly cover asset allocation…

Asset allocation means how you divvy up your capital among several categories of assets. By taking a broad view of the possible asset classes to hold, you can meet your retirement goals. Changes in the market get smoothed out by the diversified nature of the portfolio… leaving you to sleep well at night.

The key is doing it from the start and sticking to it.

First, you set aside some cash for emergencies… Then, start with a simple allocation: Decide between stocks and bonds. If you have a longer-term view and a high tolerance for risk, you might make your allocation 80% stocks and 20% bonds. If you are closer to retirement and don’t like volatile returns, you could do 70% bonds and 30% stocks.

Most of us fall somewhere in between those extremes. When starting off, I suggest using an “in the middle of the fairway” asset-allocation plan: 60% stocks and 40% bonds. It ensures you harness the proven wealth-building power of stocks… while also using the conservative, income-producing power of bonds.

The point is to combine assets, like stocks and bonds, that are not perfectly correlated (meaning their price movements are not closely related to each other). Blending them in a portfolio smoothes out your total returns.

As you get closer to retirement, you can adjust your allocation to match your risk tolerance. For example, you can use the “60/40” asset allocation while you are in your 40s, 50s, and 60s… and then start increasing your allocation more to bonds when you reach your 70s.

Once you are comfortable with that basic stock-bond allocation, you can start to get more complex, dividing your categories among, say, domestic and international stocks. Or you can divide your bond allocation among corporate, federal, and municipal bonds. You can also add a small allocation to precious metals, or what I call “chaos hedges.”

That’s Step 1. With allocation, we’ve protected your portfolio from deep swings and ensured you’ll have money until the end. Now, let’s get into the nitty-gritty of fixing your 401(k)…

Hidden fees pervade the financial industry…

The fees on fund investments are even worse. The fees always look small to the untrained eye. A mutual fund can easily charge 2%-3% of assets without looking too expensive.

When the percentages are that small, it can seem like it’s not worth your time to fret over fees. But that’s completely wrong.

Remember, these aren’t one-time fees. It’s a 2% hit every year. Over time, that 2% adds up substantially. And it’s particularly egregious considering you can find funds with fees as low as 1%, or even 0.25%.

Even more troubling, each year you pay a fee, you lose decades of compounding that would grow on top of that money.

The results add up…

Consider an investor who saves $5,000 a year, earns 8% in returns on investments, and pays a 2% annual fee. Over 40 years, he amasses $786,000.

If he cut that fee to 1%, he would finish with $1,045,000.

Think of how hard you work to save $5,000 every year for 40 years. It’s not easy. No matter how much you earn, life gets expensive. Over all that time, you set aside $200,000.

But here’s the catch, you can earn an additional $259,000… by just spending five minutes controlling the fees on your funds.

That’s easy money.

And you can do even better than that. You should be able to get your fees to less than 1% if your plan has reasonable options.

Skeptics might wonder… When we switch to cheaper funds, aren’t we going to get worse performance? Don’t bargain prices mean bad funds?

Nope. The truth is the exact opposite…

The cheapest funds in the game are index funds.

Index funds don’t have a Wall Street trader behind them, trying to outcompete everyone else and beat the market. (The majority of the smart guys fail.) Rather, index funds follow simple rules designed to help them track the overall performance of a particular asset class, like U.S. stocks or Treasury bonds.

Most “actively managed” funds (those with a manager trying to pick the best stocks) underperform the market year after year. In fact, 96% of actively managed mutual funds fail to beat the market over a sustained period.

That means you don’t have a 50-50 chance of picking a “good” fund or a “bad” fund… It hardly even matters which one you pick. The vast majority are bad and won’t beat the market.

On the other hand, index funds don’t need to pay superstar managers or an army of analysts. Ironically, they keep costs extremely low and provide better performance.

Investors are finally catching on. The index fund industry is growing. According to the Investment Company Institute Fact Book, the percentage of stock assets held in index funds has grown from only 9.4% in 2000 to 20.2% in 2014. Over the last seven years, more than $1 trillion have flowed into index funds. Vanguard’s Bond Index Fund recently surpassed PIMCO’s Total Return Fund as the largest bond fund in the world.

It’s likely your plan offers a few mutual funds that track an index.

By following these three simple steps, you can fix your 401(k) and boost your lifetime returns by hundreds of thousands of dollars… in just a few minutes.

So take the time to review your retirement plan today… It will be the easiest money you make in your entire life.

Here’s to our health, wealth, and a great retirement.

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Protect Your Retirement Income With An Annuity

Preservation of Capital: The Name of the Game

"An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirments are speculative." Benjamin Graham, the Intelligent Investor

Although big market gains get the headlines, preserving your capital is the name of the game!

Protecting the Downside

If there's one common denominator of successful insiders, it's that they don't speculate with their hard-earned savings, they strategize. Remember Warren Buffett's top two rules for investing? Rule 1: don't lose money! Rule 2: see rule 1. 

Taking a swing for the fences with no downside protection is a recipe for disaster. But can it be possible for normal investors to have upside without downside - to have protection of principal with major upside potential?  Following the 2008 crash, when people didn't have much of an appetite for stocks, some very innovative minds at the world's largest banks figured out a way to do the seemingly impossible: allow you and me to participate in the gains of the stock market without risking any of our principal!

We have come to a point in the United States where most of us feel that the only option for us to grow our wealth involves taking huge risks. We somehow take solace in the fact that everyone is in the same boat. Well, guess what? It's not true! Not everyone is in the same boat!

There are much more comfortable boats out on the water that are anchored in the proverbial safe harbor, while others are getting pounded in the waves of volatility and taking on water quick.

So, who owns the boats in the harbor? The insiders. The wealthy. The 1%. Those not willing to speculate with their hard-earned money. But make no mistake: you don't have to be in the .001% to strategize like the .001%.

Who Doesn't Want to Eat The Cake Too?

In the investment world, having your cake and eating it too would be making money when the market goes up but not losing a dime if the market drops. Below are three proven strategies with a brief explanation for achieving strong returns while anchored firmly in calmer waters.

1. Structured Notes. These are probably one of the more exciting tools available today, but, unfortunately, they are rarely offered to the general public because the high-net-worth investors jump on them before anyone else has a chance. A structured note is simply a loan to a bank (and typically the largest banks in the world). the bank issues you a note in exchange for lending it your money. At the end of the term, the bank guarantees to pay you the greater of: 100% of your deposit back or a certain percentage of the upside of the market gains (minus the dividends). 
2. Market-Linked CDs. These aren't your grandparent's CDs. In today's day and age, with interest rates so low, traditional CDs can't keep pace with inflation. Traditional CDs are very profitable for the banks because they can turn around and lend your money at 10 to 20 times the interest rate they are paying you. Another version of the insider's game. Market-linked CDs are similar to structured notes, but they include insurance from the Federal Deposit Insurance Corporation (FDIC). Market-linked CDs give you some small guaranteed return (a coupon) if the market goes up, but you also get to participate in the upside. But if the market falls, you get back your investment (plus your small return), and you had FDIC insurance the entire time. 
3. Fixed Indexed Annuities. There are a lot of annuity products out there, and some should be avoided. But this particular type is used by insiders as yet another tool to create upside without the downside. A properly structured fixed indexed annuity offers the following characteristics:

• 100% principal protection, guaranteed by the insurance company. 
• Upside without downside - like structured notes and market-linked CDs, a fixed indexed annuity allows youth participate when the market goes up but not lose if the market goes down. All gains are tax deferred.
• Lastly, and probably most importantly, some fixed indexed annuities offer the ability to create an income stream that you can't outlive. A paycheck for life! Think of this investment as your own personal pension. 

As always, be careful when choosing these products. Some have high fees, high commissions, hidden charges, and on and on. $

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Managing Post-Retirement Risks: Employment

Many retirees plan to supplement their income by working at a bridge job part-time or full-time.

Today's jobs often make few physical demands and may even be done at home. Some organizations prefer to workers because of their stability and life experience. But success in the job market may also call for technical skills that retirees cannot easily gain or maintain. Training and retraining have become increasingly important for those who want to work at older ages.

Predictability

Employment prospects among retirees vary greatly because of demands for different skills, and can change with health, family or economic conditions.

About half of all retirees retire earlier than planned, often because of job loss or poor health.

Managing the Risk

Retirement plans rarely allow for phased retirement, so a bridge job usually means working for a new employer. Re-hiring of retirees also is growing more common. These kinds of jobs often have lower pay or benefits.

Postponing retirement may be the most powerful way for workers to improve their retirement security. This allows retirement savings to keep growing while the workers accumulate more benefits from Social Security and retirement programs. Medicare-eligible retirees can take a job knowing that they will have health care coverage, even if the employer does not offer it.

Conclusion

Retirement planning should not rely heavily on income from a bridge job.

Many retirees welcome the chance to change careers and move into an area with less pay but more job satisfaction, or fewer demands on their time and energy. However, it may be difficult to find jobs in tight employment markets.

Terminating employment before age 65 may make it difficult to find a source of affordable health insurance before Medicare is available. Note that COBRA coverage usually ends after 18 months (36 months if disabled). As of 2014, health care coverage is available through state exchanges (most states).$
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Managing Post-Retirement Risks: The Stock Market

Stock market losses can seriously reduce retirement savings. But common stocks have substantially outperformed other investments over time, and thus are often recommended for retirees' long-term investments as part of a long-term investment mix.

Predictability

Individual stocks rise and fall based on the outlook for the stock market and the specific company. Individual stocks are more volatile than a diversified portfolio.


Stock index funds are diversified, but they still are exposed to the ups and downs of the stock market.


Managing the Risk

Stock market investors should diversify widely among investment classes and individual securities, and be prepared to absorb possible losses. Because it may take many years to recover losses, older employees and retirees should be especially careful to limit their stock market exposure.


A variety of polled investment "funds" exist, ranging from mutual funds and exchange-traded funds to managed accounts to hedge funds.


Hedge funds, which are private investment funds that participate in a range of assets and a variety of investment strategies, may offer some protection, but they can be complex and have high expense charges.


Stock funds offer opportunities to invest in both U.S. companies and international stocks.


Conclusion

Some financial products let an individual invest in stocks and guarantee against loss of principal. However, expenses on these products may be high, and the financial firm may limit losses by shifting most funds to bonds, thus reducing the stock exposure.


Younger workers can afford to take more risks because they have time to make up short-term losses and can postpone retirement. Older individuals might want to allocate a smaller proportion of assets to the stock market.


Target-date (or "life-cycle") funds gradually shift some of their assets out of stocks as the investor gets older. In target-date funds designed by different fund managers, the allocation to stocks at a given age varies. Proposed regulations would increase disclosure to consumers about target-date funds to bolster understanding of what these funds do and don't do.


When significant personal assets are in company stock, the risk of job loss is compounded by possible loss of savings if the company does poorly or goes out of business. Even if a company appears strong, it is safer to diversify those assets among other investments.$


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Managing Post-Retirement Risks: Interest Rates

Lower interest rates tend to reduce retirement income in several ways:

• Workers must save more to accumulate an adequate retirement fund.
• Retirees earn less spendable income on investments such as CDs and bonds; any income reinvested earns lower rates.
• Payout annuities yield less income when long-term interest rates are low at the time of purchase.

Predictability

Long-term and short-term interest rates can vary within a wide range. Underlying forces that drive interest rates include expected inflation, government actions and business conditions.




Managing The Risk

Income annuities provide retirees with a guaranteed fixed income, despite changes in the interest rate environment, but most do not adjust the income for inflation.


Prevailing interest rates will impact the amount of annuity payout the retiree can purchase from a given lump sum.


Investing in long-term bonds, mortgages or dividend-paying stocks also offers protection against lower interest rates, although the value of these investments will fluctuate. The risk is that rising interest rates will reduce the value of such assets available to meet unexpected needs.




Conclusion

Long-term interest rates often move up or down at about the same rate of inflation.


Higher real interest returns, above rates of inflation, usually make retirement more affordable. this occurs when retirees' assets include sizeable amounts of interest-paying bonds, CDs, etc.


However, some retirees have adjustable-rate mortgages or substantial consumer debt, so higher interest rates are an added burden. For such retirees, the higher interest rates that accompany increased inflation may reduce their spendable income just when it's most needed.


Low interest rates in some recent years make it clear that retirees relying on income from interest-bearing investments are subject to interest rate risk.$




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Managing Post-Retirement Risks: Inflation

Inflation should be an ongoing concern for anyone living on a fixed income. In the recent era of relatively low inflation, workers may not know about or remember the double-digit inflation of 1947, 1974 or 1979-81. Even low rates of inflation can seriously erode the well-being of retirees who live many years.

Predictability

Average past inflation can be calculated from historical data, although actual experience over a typical period of retirement may vary widely. Past inflation data can provide some help in estimating retirement needs, but there is no guarantee that future inflation will match historical experience.

Managing the Risk

Many investors try to own some assets whose value may grow in times of inflation. However, this sometimes results in trading inflation risk for investment risk.

Investment returns from common stocks have increased more rapidly than consumer prices in the long run. But in the short term, stocks don't offer reliable protection against inflation. The historically higher returns from stocks are not guaranteed and may very greatly during retirement years.

Inflation-indexed Treasury bonds grow in value and provide more income as the Consumer Price Index goes up. Many experts say that retirees' investments should include some of these securities.

Inflation-indexed annuities, not widely used in the United States, adjust payments for inflation up to a specified annual limit. Annuities with a predefined annual increase also are available. These kinds of annuities cost more than fixed-payment annuities with the same initial level of income.

Investments in natural resources and other commodities often rise in value during periods of long-term inflation, but the values may fluctuate widely in the short run.

Conclusion

Inflation can be a major issue, especially as retirement periods lengthen. Inflation is not highly predictable.

Retirees can set aside assets that will permit a gradual increase in consumption.

Providing for expected inflation one way or another, although costly, is needed in any realistic plan for managing resources in retirement.

Delaying receipt of Social Security will build up valuable inflation-indexed benefits for retirees and spouses.

When housing values were increasing, homeowners seemed to have a hedge against inflation, but this has not been true in recent years.

Current and future retirees who have expected to use their home equity as a source of retirement income may be sorely disappointed, especially if housing values continue to decline. Strategies that rely on increases in the value of housing and selling quickly are very risky, since the value may not rise and it may take a long time to sell the house.$

Next Risk: Interest Rates

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Managing Post-Retirement Risks: Longevity

The past decade has seen not only economic uncertainty and volatility, but also an increased emphasis on individuals taking responsibility for securing their financial well-being in retirement. As a result, today's retirees may be exposed to a variety of risks that can affect them both as individuals and as members of society.

Longevity: Outliving Retirement Resources

Managing one's own retirement funds over a lifetime has many pitfalls, even with expert help. Nobody knows how long the money must last.

Life expectancy at retirement is an average, with some retirees living longer and a few living past 100. Counting on living only to a certain age is risky, and planning to live to the average life expectancy for someone their age will be inadequate for about half of retirees. In theory, retirees want to make sure their money will last a lifetime without cutting back on expenditures or reducing their standard of living. In practice, unexpected events may make this very difficult.

A licensed insurer is the only entity outside the government that can contractually guarantee to pay lifetime income. However, purchasing an annuity involves trade-offs; the household must give up the account balance to purchase the income stream. Financial products from firms that aren't in the insurance business could run out of money to pay income to a long-lived individual.

Predictability

Long lifetimes are difficult to predict for individuals. It's easier to predict the percentage of a population with a long life than to do so for an individual. In the total population, women live longer than men and wives outlive husbands in most cases.

Longevity has increased over time. Any medical breakthroughs could bring additional improvement.

Managing the Risk

Social Security, traditional pensions and immediate payout annuities all promise to pay an individual a specified amount of income for life. In addition, they may also pay income to the surviving spouse or other named survivor. Some newer products can help protect retirees from outliving their assets.

Deferred variable annuities and indexed annuities can include guaranteed lifetime withdrawal benefits that guarantee the availability of annual withdrawals up to a specified amount, even after withdrawals have exhausted the account value.

"Longevity insurance" is an annuity that guarantees a specified income amount but does not start paying benefits until an advanced age, such as 85. This niche product may fit into a carefully designed financial plan.

"Managed payout" plans, offered in several forms by financial services firms, enable the retiree to draw down assets gradually. Lifetime income from such plans is not guaranteed, but is set at a level that provides a high probability that income can be received for many years, e.g., to age 90. In some cases, a "contingent deferred annuity" can be added to guarantee that the income payments will continue for a lifetime.

A Reverse Mortgage can convert home equity into ongoing monthly income as long as the homeowner lives in the home. Administrative charges for these mortgages can be high.

Conclusion

"Payout annuities," also called immediate annuities or income annuities, can be useful for retirees because they maximize the amount of guaranteed lifetime income available from a sum of money.

Some mutual fund companies are offering "annuity alternative" arrangements to ensure liquidity in retirement with cash/mutual fund structures that can be blended with annuities.

An annuity that seems unattractive to buy at retirement age may make sense later. Multiple annuity purchases can be made over time to average interest rates inherent in their purchase prices. People generally should not annuitize all their assets, but they may want to consider annuities in their overall retirement plan.

Financial projections can be very useful in retirement planning , but actual experience will differ. All retirees should review their expected income needs and sources at least every few years and adjust spending if necessary.

Reverse mortgages can help to mitigate risk in some cases, but they may also increase it in others. Care is needed in the use of these products. The mortgage proceeds can be paid in a lump sum, as a monthly income, or as a line of credit.

Annuities and reverse mortgages differ in an important way. When interest rates are higher, you get higher monthly payments when you buy an annuity. In contrast, when interest rates are higher, you get lower monthly payments if you take out a reverse mortgage.

Retired individuals with outstanding mortgages can effectively improve their monthly cash flow by replacing the conventional mortgage with a reverse mortgage, using the lump sum proceeds of the reverse mortgage to pay off the conventional mortgage.$

Next up: Inflation

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Retirement Income Planning: Risky Business



With millions of baby boomers in or nearing retirement, a huge concern is what to do with the trillions of dollars in retirement savings that they have accumulated. How do they reinvest their savings, ration it over time, or protect it from taxes?

Few employer-sponsored retirement plans offer advice or options for converting savings into retirement income. Many people will leave their plans with a lot of money but no strategy for investing it, protecting it from taxes, or spending it. Without a strategy, an employee may withdraw her money in one lump sum, fail to roll if into an IRA, and lose 25 percent of it to taxes in the first year. Obviously, the a sense of an income plan raises the risk of running out of savings during retirement. 

Running out of money in retirement is too large a risk to self-insure. Retirees need the best information and tools to help them determine how much income they will need, where the money will come from and how to make it last. They need access to safe, affordable lifetime income products.

Given the continued importance of individual responsibility in accumulating and managing retirement assets, there is a greater need than ever before for education and guidance. Individuals who do not fully understand their situation can be unduly influenced by emotions. For example, as the Hueler Companies noted in in its written statement to the United States Senate Special Committee on Aging in June 2010, research indicates that retirement decisions are often influenced by behavioral factors - such as fear of the unknown, lack of trust, and desire for control.

Retirement age plays a critical role
One of the most important decisions individuals face is when to retire. The Society of Actuaries 2007 and 2009 Surveys Post-Retirement risk indicate that many people do not fully understand the impact of retiring later, and that they underestimate the impact of working longer. In addition, the decisions surrounding Social Security claim in age are misunderstood, especially by couples.

An unprecedented challenge 
The challenge for those who are pension-less - including those who have ample savings - will be to convert those savings into do-yourself pensions. The new retiree will face three important risks: sequence-of-return risk, investment risk, and longevity risk. These risks exist for almost everyone, but not everyone chooses to acknowledge them - and even fewer choose to insure against them. Transferring these risks are for people who choose not to ignore:

• Investment risk: The possibility that your portfolio won't earn enough to support you in retirement.
• Sequence-of-returns risk: The chance that, just before or after you start drawing down your savings, a sharp market downturn and take a huge bite out of your portfolio and greatly increase your chance of running out of money too soon.
• Longevity risk: The chance that you'll outlive your financial resources.

In the distant past, many people worked at a single company for their entire career. At retirement, most people left the company with a pension that took care of their retirement income needs for the rest of their life.

When it came to figuring out retirement income, all one had to basically do was fill out a form to determine how they wanted to take their pension and whether or not they wanted to include a spouse. From there, their job was quite simple: merely deposit each check every month (before direct-deposit days) for the rest of their lives.

All the difficult and complicated decisions as to...

• Where to invest
• How to get the most amount of income
• How to compensate for inflation
• How to ensure one wouldn't run out of money
• How to keep income flowing to a surviving spouse

...were left in the hands of professional actuaries and managers who collectively spent all their time making all these complex decisions for us.

These days, however, things have changed quite a bit. Especially of the last decade, pensions have quickly become a dinosaur of the past. Only a select few still get them and for those that do, governments and corporations are successfully reducing, and in some cases, completely eliminating them.

So it's now up to us individuals to do the job that those full-time, experienced pension managers once provided. In most cases, retiring simply means retiring from one's job but the work isn't over. In many cases, it's just begun and this new work is being the CEO of your own retirement company. Are you prepared to handle this responsibility and these risks on your own?$

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Annuitizing Retirement

Retirement today requires more planning than for previous generations. Americans are living longer - many will live 20 to 30 years or more in retirement. Finding a way to make savings last over such a long period of time is one of the biggest challenges of today's retirees.

In addition, sources of steady retirement income have changed. Fewer workers are covered by traditional employer-provided pension plans that provide a lifetime benefit. Also, Social Security is not likely to provide future retirees the level of benefits that it provides today. Americans need other ways to create and guarantee lifetime income so their standard of living doesn't decline with age.

To achieve a secure retirement, more and more retirees are including an individual annuity in their plans. An annuity can provide a steady stream of income for life, shifting the burden of managing savings from you to your life insurance company. No other personal financial product offers this guarantee of lifetime income. For many, the income guarantee helps offset worries associated with running out of money.

To assure yourself an income during retirement, consider "annuitizing" a portion of your retirement savings. Annuitizing means converting some of your assets into regular income that can last for a specific number of years or for life. This post will explain the pros and cons of annuitization and help you decide if it's the right way to help meet your retirement income needs.

Should you annuitize?
You should annuitize if you want to reduce the risk of outliving your assets. Because you receive a guaranteed income stream, annuitizing can help protect your standard of living in retirement.

When is the best time to convert to an income stream?
It depends on your situation. It could be at retirement  or whenever you need to replace other sources of income.

How much income could you receive by annuitizing?
It depends on the amount you convert, your life expectancy, interest rates, and the payment option you choose.

Can you change your mind after annuitizing?
The decision to convert is irrevocable - you can't change your mind. And once you choose an annuity payment option, the decision becomes irrevocable as well.

Benefits of Creating an Income Stream with a Portion of  Your Retirement Assets

• Guarantee yourself - and someone else, if you wish - an income for life. (Other distribution methods - automatic withdrawals, lump-sum distributions - don't do this.)
• Spend more comfortably, knowing that your risk of running out of money is reduced.
• Create your own pension.

Set up your income stream to meet your priorities
By choosing the right payment option and calculation method, you can tailor your income stream to meet your needs, and, if you wish, the needs of your spouse or others.

Choose a payment option

Option 1: Life annuity.
If you choose yourself as the "annuitant" - the person whose life expectancy will be used to calculate each annuity payment - you'll be guaranteed income for as long as you live.

Option 2: Joint and last survivor annuity.
If there are two annuitants, such as you and your spouse, payments will continue as long as either of you is living. The survivor, or joint annuitant, can receive payments that are 100%, 75%, or 50% of the original amount.

Option 3: Life annuity with period certain.
You'll receive payments for a specific periods ranging from 5 to 30 years. If you die before the period ends, your beneficiary receives the remaining payments. This option is available only with fixed payments.

Other income options are available. You also can choose to receive income in a series of payments for a specified number of years.

All annuity contracts offer their owners the right to convert the money in their annuity to a guaranteed lifetime income. If the owner buys an immediate annuity, the conversion takes place within a year of the purchase date. If the owner buys a deferred annuity, he has the right to convert at some future date.

Federal Tax Treatment
Earnings on a deferred annuity build up free of current federal income tax. When you withdraw money or receive income payments, the portion that comes from earnings is taxed as ordinary income. With an immediate annuity, you pay ordinary income taxes on any earnings when you receive payments. The portion of the payment that represents your initial contribution is not taxed if your annuity was purchased with after-tax dollars.

Because taxes are deferred until money is withdrawn or received as income, there are tax penalties for early withdrawals. If you choose to withdraw money from your deferred annuity before you reach age 59 1/2, you will trigger a 10 percent tax penalty on the earnings portion of the amount withdrawn plus the income tax due on earnings.

Annuity earnings also may be subject to state taxes, which vary according to state. Check with a local tax adviser for more information.$
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The Facts About Fixed Indexed Annuity Compensation

Clearing up the confusion that can surround the subject of commissions and compensation on financial services products is very important. Financial journalists routinely fail to differentiate risk-based variable annuities from guaranteed fixed annuities. This omission leads to consumer confusion and even greater retirement illiteracy. Let's look at some basic facts.

Common Misconceptions About Indexed Annuities
There is not one type of annuity. There are two types: fixed and variable. Typically, when it comes to articles relating to annuity fees and commissions, these two very different types of annuities are lumped together under the broad term "annuities". This common practice is very confusing to the reader and does not help them understand their annuity choices.

Variable annuities offer investment choices, and returns are determined based on the performance of the investment options chosen. The money placed in the variable annuity is not protected from market loss.

From a fee perspective, variable annuities can include insurance charges, investment management fees, surrender charges, and rider charges.

Fixed annuities promise that you will never lose money as long as you follow the terms you agreed to when you purchased the annuity. Fixed annuities also promise that you will at least receive a guaranteed minimum interest rate.

Fixed annuities pay a guaranteed interest rate for a set period of time. This rate reflects reductions for expenses and profits. The rate is clearly stated in the contract and is easy to compare with other fixed annuities or similar products. Fixed annuities typically have surrender charges.

A Fixed Indexed Annuity is NOT an investment product. Because an indexed annuity is not an investment, it is not designed to perform like one. Indexed annuities are not intended to earn interest that is comparable to investments during the best of bull markets. However, because an indexed annuity is an insurance product, and not an investment, your annuity will not lose value when the market goes down.

The costs of marketing and providing the insurance guarantees are paid for by the insurance company the same way all insurance product expenses are paid for, including homeowners, auto and life - under the general account of the insurance company. Most importantly, the annuity buyer's premium and earned interest (annuity value) is never charged to cover these costs. Optional income riders can be purchased and are paid for out of the annuity value.

The average commission paid on indexed annuities have continually dropped, and average around 6% (and even lower for annuities sold to older-aged purchasers). Keep in mind that this commission is paid one time, at point-of-sale only, and the agent services the contract for life.

How Insurance Agents are Paid
There are essentially three types of compensation structures in the financial services sector. The first type is a commission, paid to the agent at the time the annuity is sold, once the annuity premium has been paid. Since most annuities are purchased with a single premium, the agent is paid only one time; they are not paid again on that annuity. The insurance company pays the agent directly in this type of compensation structure. There is no need to pay continuous commission payments on an indexed annuity, as are paid out with the next type of compensation structure.

The second type of compensation is paid based on assets under management (AUM). This type of compensation structure is used by most financial professionals who manage asset portfolios or sell securities, which can both increase and decline in value. In this structure, the financial professional is paid continually, often at a rate of 1% or more annually, on all of the assets that he or she manages for the client. This type of compensation arrangement provides incentive for the financial professional to manage the assets responsibly, and minimize any losses. The compensation paid to such financial professionals is paid directly from those assets. Because the financial professional is being paid to manage the assets, they are paid continually, regardless of the asset performance.

The third type of payment structure is often referred to as fee-based. A financial consultant charges a fee to review the customer's financial objectives, design a plan to meet those objectives, and make recommendations on what products to purchase to achieve those objectives. When the plan is executed, the customer may pay asset management fees, the insurance company might pay the agent for the sale of an annuity, or both payments may be made, depending on the plan and the products purchased.

In closing, annuities are not perfect products - there is no such thing. Annuities are neither one-size-fits-all nor too good to be true. However, annuities are fantastic contractual solutions that solve specific problems. Your situation is unique to you. When making a decision to purchase an annuity, it's important to remember that you should own an annuity for what it will do (contractual guarantees), not what it might do (hypothetical returns).$

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The Importance of Guaranteed Income in Retirement (Why Guaranteed Income Matters)

Lifetime Income Stream Key to Retirement Happiness

Pensions that provide  guaranteed income have become increasingly rare around the world, as employers have shifted from defined benefits plans to defined contribution plans. Studies in the U.S. have shown that retirees with a guaranteed income stream are more confident about their financial future.

The high costs of retirement mean that most people won't be able to rely on simply withdrawing from savings - they'll need to generate some sort of income through investments.

Far to many people believe they will be able to live in retirement by just drawing down their savings. But as people live longer and health care costs increase, this approach leaves people at risk of outliving their savings. Every withdrawal decreases the pool of assets needed to weather down markets, and rising inflation can make it necessary to draw more income than expected.

One in Three Americans Say Guaranteed Income is Top Retirement Priority

Two new TIAA-CREF surveys highlighted the troublesome facts of American retirement savings. Nearly three-quarters of Americans don't have or are unaware of lifetime income options through retirement plans, which could make it difficult for the 34% looking to retire early.

In one survey, just a third of workers who participates in a retirement plan say the primary goal is to generate guaranteed monthly income, but 72% say they either don't have or are unaware of this option. The second survey found that 21% of workers reported having not saved anything for retirement and 44% are saving 10% or less of their current income. Experts recommend saving at least 10% to 15%.

TIAA-CREF found that 44% of respondents are somewhat or very concerned they may run out of money in retirement while just 21% expect to receive income from annuities.

Retirement security is too important for wishful thinking and guesswork. All workers deserve a secure retirement, but many need help in setting realistic plans to achieve that goal. With life expectancies increasing rapidly, lifetime income options are essential to sustaining financial well-being over a lengthy retirement. A more reliable strategy is to guarantee a portion of savings as income you can't outlive to help cover essentials, like food and housing. Annuity payments create an income stream that lasts for life, even if your retirement stretches for 30 or 40 years. 

Annuities sold through big insurance companies like Allianz, American Equity and ING have soared in popularity as retirees have come to understand that guaranteed lifetime income makes them more financially confident - and happier, too. In general, fixed annuities offer the best combination of certainty and cost.

So, the next time that you hear or read a financial "expert" downplay the importance of a guaranteed income stream, just remember that he/she has their best interests at heart, not yours.$

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The Truth About "Hidden" Annuity Fees

On a daily basis, consumers are bombarded with warnings from the financial press to beware of the "Hidden" costs and "High" fees associated with annuities. These misconceptions have undoubtedly kept some people from buying these financial products. Many annuities have come a long way in terms of lowering costs and clearing up confusion among shoppers. Also, stricter suitability standards mandated by State Insurance Commissioners have also made the annuity shopping experience a more transparent one.

 

While determining if an annuity is the right financial vehicle to help you solve for your specific needs, shoppers could benefit from knowing the rules of the road. By asking the right questions up front, and by having a better understanding of the features you might be paying for, you should be able to get a much clearer sense of whether an annuity may fit your needs.

 

Start by following some basic guidelines for evaluating the potential costs of annuities. Then, dig a little deeper into the details of any specific fees and determine whether it's worth paying for added features that may appeal to you.

 

Understanding the Big Picture

There are different types of fees that are specific to certain types of annuities. You should consider some general guidelines when contemplating annuity costs. For example:

 

Know your needs. The fees you pay for annuity features can reduce your overall return, so opt only for those features that you will use. If your situation and planning needs warrant these added features, then make sure you try to pay a reasonable price for a product with those features. For example, if maximizing money left to heirs is an important consideration, may be worth the added cost for a feature that provides more for heirs after you die.

 

Understand the product. Some annuities can be complex products to understand. When you're considering a purchase, it's important to understand how the proposed annuity works, what its benefits may be, and, perhaps most importantly, what role it can help play in your overall financial plan. Be sure to carefully read the marketing materials and prospectus (if applicable). If you don't understand what you're paying for, make sure to ask questions and receive full disclosure before making a decision.

 

Focus on value, including the price. It's important to evaluate any annuity's costs versus the guarantees it promises. Not all guarantees are created equal. Some guarantees involve cumbersome restrictions that may diminish their appeal, regardless of price. On the other hand, keep in mind that when you buy an annuity, part of what you are paying for is the creditworthiness of the insurance company standing behind those guarantees.

 

Get Familiar with Fee Types

While you don't have to become an expert on all annuity fees, knowing the most common types will help you evaluate products and ask the right questions. Generally, there are four typed of annuity fees:

 

Insurance charges. Also known as mortality and expense (M&E) fees and administrative fees, these charges pay for insurance guarantees that are automatically included in the annuity, and the selling and administrative expenses of the contract.

 

Surrender charges. Most insurance companies limit the amount of withdrawals one can take during the initial years of a contract, and place a surrender charge on any withdrawals above a preset limit. Be careful, as surrender charges can be significant and be imposed for an extended time period. Be sure to ask for details on any surrender charges to help ensure that you have enough flexibility.

 

Investment management fees. These are assessed depending on the investment options within variable annuities, and are similar to management fees on mutual funds. Check the annuity prospectus for any underlying funds to learn how much you might pay for investment management fees.

 

Rider charges. Riders are optional guarantees available in some annuities. There is typically an additional cost to purchase a rider in an annuity.

 

Fees Vary Among Annuities

It is really misleading to lump all annuities together when the pundits sound the alarm about "Hidden" and "High" fees. Different types of annuities - whether variable or fixed,- income or deferred - charge different types of fees (see the chart below). Generally, variable annuities charge explicit fees, while fixed annuities tend to embed their costs in the interest rate (like CDs) or income payout amount.

 

Types of Annuities and Their Key Expense Components

 

 

Getting Good Value

There are a few other important considerations before making an annuity purchase.

 

Consider the totality of all costs. Rather than focusing on any single fee component, it's wise to look at all the associated costs together.

 

Buy from someone reputable. Whether you're working through an advisor or directly through a distributor, get the facts on the firm's financial strength and business practices. What is the company's rating with third-party ratings agencies? Is it known for fair claims-paying practices? How reliable is its customer service? Dealing with a company that's fair and financially sound may help save you from financial headaches in the long run.

 

Educate yourself. Knowledge is power. The marketing materials and prospectus (if applicable) can be invaluable in determining whether the benefits offered by the product are worth the associated costs. But, if it's not clearly spelled out, make sure to ask your financial advisor about any potential costs that might not be apparent.

 

Recent economic challenges have made it more important than ever to do your homework comparison shop when it comes to major purchases. Buying an annuity should be no different. It's easier to understand what you're buying if you do your homework. For more information, visit our website.$

 

www.RayBuckner.retirevillage.com 

 



 

 

Tips for Buying a MYGA Annuity

A Fixed Deferred MYGA ("Multiyear") Annuity is a tax-favored wealth accumulation contract issued by an insurance company. Its main advantage over a mutual fund or bank Certificate of Deposit is that earnings grow in your account on a tax-deferred basis. This means you pay no income taxes until you withdraw money from the account. Because of this, the value of your account is able to increase more quickly since the entire amount of each year's earnings works to create new earnings. You can fund a deferred annuity with personal savings ("after-tax" or "non-qualified" monies) or with a "rollover" from a qualified account such as an IRA or a lump sum distribution from a qualified pension plan. In this case, there is no tax advantage offered by the deferred annuity over the IRA, since monies in an IRA already grow tax-free.

In addition to compounded tax-deferred earnings, annuities may also offer a high degree of safety. Your premium and earnings are guaranteed by the claims-paying ability of the issuing insurance company. Insurance companies are required by law to set aside assets (known as "reserves") in order to cover the claims of their policyholders. Companies are also regularly monitored by ratings agencies such as A.M. Best, Standard and Poor's, and Moody's. By reviewing the ratings an insurance company receives from the rating agencies you may determine if it is operating on a sound financial footing.

The most common form of MYGA is a Single Premium ("SP") annuity. "SPs" accept a one-time-only deposit and accrue interest until the contract is surrendered or annuitized. A Flexible Premium ("FP") MYGA contract is one which accepts multiple deposits.

Virtually all MYGAs offer the contract holder a high degree of control over his/her investment. At the outset, there is a "right to examine" or "free look" period (10-20 days in most states) which allows you to return the policy for a full refund for any reason. Afterwards, you can cancel the contract at any time, although doing so will likely cause you to incur a surrender charge and also a market-value adjustment (a plus or minus "MVA") charge.

MYGA Interest Rates

The Initial Interest Rate and the length of time for which this rate is guaranteed (called the "Rate Guarantee Period or "RGP") are two of the most important features of a MYG annuity. Most insurance companies credit interest daily, allowing earnings to compound on a basis known as "day of deposit to day of withdrawal."

Some insurance companies offer "bonus" interest rates, which can tack on as much as 5% to the current first-year's interest rate, boosting the yield to 9% or higher. As alluring as these bonus rates may seem, they can also be confusing. Some companies only pay the bonus if you eventually annuitize with that company and take your money in monthly installments over a period of at least 10 years. If you want to withdraw your money in a lump sum, the insurer may retroactively subtract the bonus as well as the interest attributable to that bonus.

In a MYGA annuity, interest is credited at a declared rate for the full RGP. Some policies credit the same interest rate for the duration of the RGP. Other policies credit a bonus rate in the first year of the RGP and a lower rate for the following years. In either case, however, there is no uncertainty about the interest rate that your account will earn.

Expenses

Fixed annuities have no upfront sales charges. It would also be unusual for fixed annuities to charge maintenance fees. Because of this, 100% of your deposit - without any deductions - goes directly to work for you in your account.

Penalty-free Withdrawals and Surrender Fees

Almost all insurance companies let you withdraw interest as it is earned without having to pay a surrender penalty. Many also allow free withdrawals of up to 10% of your contract value (principal plus accumulated earnings) each year. If you want to withdraw more than 10% of your contract value, you are likely to be charged an Early Surrender Penalty. This is assessed as a percentage of the amount that exceeds the Penalty-Free Withdrawal amount. These charges are not the same as the 10% early withdrawal penalty that the IRS imposes when you take funds out of an Single Premium Deferred Annuity (SPDA) before you reach age 59 1/2.

Shopping for the Best Deferred Annuity

It is best to work with an agent that has the ability to comparison shop and find the best annuity that meets your particular needs. You can request a free quote on our website.$

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Inflation During Retirement (Makes Me Want To Holler)

"Inflation, no chance
To increase, finance,
Bills pile up, sky high
This ain't livin', no, this ain't livin'"

Marvin Gaye, Inner City Blues

Inflation. You can't afford to ignore it. People retiring today can expect to live another 20 years, according to Social Security figures. But, since roughly one in five of us will live past age 90, we have to account for 30 more years when making our financial plans.

Once you're retired, you live on a fixed income. There are no more raises, bonuses, or employer contributions to your retirement plan. Even if you can afford your lifestyle today, you have to worry about what's going to happen over the next 30 years as prices inevitably rise, some years more than others. Will Social Security keep up? Will your investments produce enough income?

Remember hearing about the era when grandma paid 20 cents to see a movie? Think back to your own childhood. How much did an afternoon at the movies cost when you were 10? A lot less than it does now! That's inflation.

The reason this matters to you and your retirement savings is that inflation can eat away at your money from two directions:

1. Inflation erodes savings. Inflation doesn't just literally reduce the number of dollars you possess, but it does reduce your purchasing power. The interest rate your savings account or CD is paying is likely well below the rate of inflation, which means that the cost of goods and services is climbing much faster than the value of each dollar in that savings account or CD. For example, assume that your annual budget for 2014 requires a net total income of $50,000. You can expect that purchasing exactly the same goods and services in 2019 will cost more with inflation. That's why many employers periodically offer cost-of-living raises to help you keep up. Unfortunately, your savings account does not get a comparable raise. On average, each dollar you own loses purchasing power and therefore value every year.
2. Inflation depletes budgets. During retirement, when you're no longer a full-time wage earner, budgeting becomes especially important. To help increase the likelihood that your savings will last through retirement, you'll have to establish a budget. The problem is that $50,000 per year in 2019 is expected to buy fewer goods and services than it will in 2014. And in 2024, $50,000 will probably buy even fewer goods and services than it did in 2018. You get the picture. You can't plan to spend the same amount of money year after year and continue to meet your needs in exactly the same way. So, as a retiree, you'll need to give your budget a cost-of-living adjustment every couple of years in order to continue buying the same goods and services.

You'll need to be especially aware of inflation in a few areas:

Medical costs are on the rise, and they're significantly outpacing CPI inflation averages. In retirement, you're likely to need more medical care than you do at a younger age, so carefully consider medical inflation as you plan your retirement. 

Food costs can be volatile. For example, dairy, beef and grains have seen pricing spikes in recent years due to factors such as drought, livestock illnesses and changing farming practices. Expect more of the same in the future. 

Fuel costs, like the price of gas, tend to affect most goods since shipping prices increase with fuel prices. As shipping costs rise, so do costs for goods that are shipped. And if you plan to travel in retirement, you'll also feel the impact of fuel inflation on how much it will cost you to fly or drive. 

What can you do to fight inflation during retirement?

First, as you calculate your retirement needs, you must incorporate inflation into your planning. You can find a variety of online calculators to help you do this, or else consult a financial professional. 

Second, a portion of your retirement portfolio should remain invested even during retirement. Bonds, CDs, money market funds, and bank savings accounts alone, which are generally considered relatively safe places to put your money, may not provide enough growth to outpace inflation. A portfolio consisting of stocks, bonds and annuities can greatly enhance your chances of meeting your financial goals during retirement. For more information and online calculators, visit my website.$

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Retirement: Five Financial Risks Ahead

In retirement, there are five major financial risks that must be accounted for. Your retirement income plan needs to have a solid strategy that helps you address and navigate these risks.

1. Interest Rate Risk. Traditionally, bonds were a great option to provide interest income to help supplement a retirees' Social Security or pension benefits. If a retiree required an extra $40,000 in annual income, and bonds were paying 4%, they would have to purchase $1 million worth of bonds. This would basically be an all-in strategy, where all of a person's savings went into bonds. That was ok when people retired at 65 and lived to age 72. Now, we have potentially 30-year periods in retirement. This leaves the retiree exposed to interest rate risk. Just what is interest rate risk? A fundamental principle of bond investing is that market interest rates and bond prices generally move in opposite directions. When market interest rates rise, prices on fixed-rate bonds fall. Interest rate risk is common to all bonds, even U.S. Treasury bonds. A bond's maturity and coupon rate generally affect how much its price will change as a result of changes in market interest rates. A bond's yield to maturity shows how much an investor's money will earn if the bond is held until it matures. If you have to sell your bonds before maturity, say when interest rates are rising, they may be worth less than you paid for it.
2. Market Risks. Another strategy is a mix of stocks and bonds. Bonds provide interest and stocks would give growth, providing a hedge for inflation. The problem with this drawdown strategy is that the markets have to cooperate. If you start taking income when markets are down, you are really decimating your portfolio. You're exponentially increasing the chances of running out of money in retirement. Stocks and bonds can be down at the same time. Market risk is the possibility for an investor to experience losses due to factors that affect the overall performance of the financial markets. Market risk cannot be eliminated through diversification, though it can be hedged against. The risk that a major natural disaster will cause a decline in the market as a whole is an example of market risk. Other sources of market risk include recessions, political turmoil, changes in interest rates and terrorist attacks.
3. Longevity Risk. Individuals often underestimate longevity risk. In the United States, most retirees do not expect to live past 85, but this is in fact the median conditional life expectancy for men at 65 (half of 65-year old men will live to 85 or older, and more women will). For individuals, insurers provide the majority of products designed to help individuals manage the risk that they outlive their assets. Individuals without defined benefit plans can ensure lifetime income by purchasing annuities within their defined contribution plans and personal retirement accounts.
4. Inflation Risk. Inflation risk, also called purchasing power risk, is the chance that the cash flow from an investment won't be worth as much in the future because of changes in purchasing power due to inflation. Although the record inflation of the 1970s is history, inflation risk is still a common worry for income investors. Inflation causes money to lose value, and any investment that involves cash flows over time is exposed to this inflation risk. The ramifications of this can be serious: The investor earns a lower return than he or she originally expected, in some cases causing the investor to withdraw some of a portfolio's principal if he or she is dependent on it for income. It is important to note that inflation risk isn't the risk that there will be inflation, it is the risk that inflation will be higher than expected.
5. Healthcare Risks. Inflation on healthcare costs coupled with living longer in retirement can spell disaster if not properly managed. Compounding this issue further is the rate of inflation on items such as prescription drugs and preventive care, which have historically exceeded the 3% general rate of inflation. According to a 2011 Fidelity Investments study, a 65-year-old couple would need $230,000 to pay for medical expenses through retirement, not including long-term care costs ranging from $35,000 for assisted living facilities and home health care, all the way up to $70,000 or more for nursing home care. These are significant expenditures which show no sign of decreasing. Traditional solutions such as Medicare and Medicaid are helpful, but they aren't always enough to meet an individuals needs. Around 69% of pre-retirees are very or somewhat concerned about having enough money to afford adequate healthcare; 51% of retirees share that level of concern. Additionally, 63% of pre-retirees are concerned about having enough to pay for long-term care; 52% of retirees share that concern.

If you are nearing retirement, or are already there, you need a strategy that addresses ALL of these risks. Professional mountain climbers know that most fatalities and injuries happen on the way down the mountain, not during the climb. Likewise, you have successfully navigated your way to the retirement savings summit. Now, you need a way to safely de-cumulate. There are a lot of risks to staying retired. If your current advisor is not helping you address all, or at least most of these risks, it's time for a second opinion.$

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