Are you one of the 59 percent of Americans worried about not having enough money in retirement? According to a recent Gallup survey, nearly half of Americans said they were concerned about their ability to maintain their standards of living or even to pay normal bills when they retire.1
For many people, income in retirement stems from some combination of Social Security, pensions and personal savings. The fear of running out of money is real. If you don’t have a plan, you could end up with insufficient income for the later years of your retirement.
How can you ensure that doesn’t happen? Below are four steps you can take today to protect your retirement income:
Create an emergency savings account.
You never know what life may throw at you. When emergencies happen, they often mean large, unexpected costs. Your house might need repair, or you could get stuck with substantial out-of-pocket medical expenses. If you’re not prepared, such situations have the potential to significantly impact your financial future.
One way to ensure you’re prepared is to designate a separate savings account specifically for emergency expenses. The more you are able to set aside now, the less likely you’ll be forced to make excessive withdrawals from your other sources of retirement income. If an emergency does occur, you can minimize the chances it will have devastating financial consequences.
A budget is one of the most effective tools you can use to protect your finances throughout your retirement. The ability to create a sound budget and stick to it is critical for retirees living on a fixed income.
Tracking your spending habits enables you to be in control of your finances. The ability to successfully budget will empower you to make the best financial choices for yourself and can help you avoid preventable problems.
Choose a dynamic withdrawal strategy that adjusts with your needs.
It is common for retirees to withdraw a yearly flat amount or fixed percentage of their investments as a method for generating income. But you may want to consider employing a more customized, dynamic withdrawal strategy.
A dynamic withdrawal strategy allows you to adjust your withdrawal amount on a yearly basis according to your needs and circumstances. This enables you to modify your income based on factors such as investment performance, other sources of income and the age at which you choose to file for Social Security benefits. A financial adviser can help you develop a dynamic strategy that is tailored to your needs.
Increase your sources of guaranteed income.*
Social Security and pensions are perhaps the most typical sources of guaranteed retirement income, but they aren’t the only ones. You may want to consider different types of annuities that can help you convert your personal savings into a steady stream of guaranteed income.
One example of this is a single premium immediate annuity that enables you to provide a lump sum, which the annuity company will distribute back to you in a guaranteed income flow.
Certain deferred annuities also offer features like guaranteed lifetime income benefits. This allows you to withdraw a certain percentage of the account balance on a yearly basis. That percentage amount is guaranteed for life, regardless of the annuity’s performance.
If you are needing help with your retirement strategy, contact us at Coventry Financial.
*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values.
This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.
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