Are you comfortable with the risk, volatility, and potential losses in your 401K plan? We have found most people have a large portion of their retirement savings are dependent on their 401k plans, yet they don’t understand or even like their 401K. They feel stuck.
If you’re working and 59 ½ or older, the IRS allows you to enact an “In-Service Transfer” of your current 401K plan to your IRA of choice, and you won’t pay any income taxes on the transfer. An “In-Service Transfer” can be very beneficial for a 401k plan, if you are trying to reduce risk, fees, or establish a plan now that will provide you guaranteed lifetime income when you retire.
The number 1 fear almost every retiree has is running out of money during retirement, however, there is a way that you can set yourself up for dependable income in retirement. If yours is not guaranteed to be paid to you for as long as you live, you’ll continue to worry day-after-day, year-after-year.
You can eliminate your fear of running out of money by creating income in retirement that’s guaranteed to be paid to you for as long as you live, regardless of stock market volatility, losses, or longevity.
Stocks can’t provide you a high level of income guaranteed for as long as you live, neither can mutual funds, bonds, bank accounts, or CDs.
For decades you’ve been a dedicated saver for retirement, seen crashes and rallies, gotten a lot of advice, and have tried to do all the right things with your money, but you still worry. The biggest problem isn’t your lack of understanding; it’s that you don’t have an actual written plan.
Do You Have Responses to these Critical Retirement Planning Considerations?
All retirees have their own unique beliefs about what a successful retirement looks like, yet too many are unable to answer important financial questions about achieving that success. And, when you can’t find answers to your most pressing money questions, it’s difficult to feel financially secure.
In our 50+ years of experience, we’ve come to realize that there are nine specific questions you need to be able to answer about your money in order to plan – and achieve – a successful retirement:
How much money can you safely take out of your assets for income?
How long will your money actually last?
Can you guarantee you will never run out of money?
How can you protect your assets from volatility and losses?
How much income tax will you pay on your income distributions?
How much will you lose if the market takes another big drop?
Is it OK to start spending some of your money?
What are the total fees you are really paying and how can you reduce them?
What is going to happen if you or your spouse pass away?
If you can’t answer these nine questions, it means your retirement planning is based on hope and luck – not the best recipe for success. Read on to learn Momma’s Secret Recipe, instead.
*Number 4 – Earn a reasonable rate of return based on the amount of risk you’re willing to take, not by taking excessive risks to get the highest rate of return that rarely materialize.
You saved so you could have a secure, worry-free retirement. Retired, or neared retirement, you constantly worry about your money because you are no longer receiving a paycheck.
You worry about your portfolio, all the volatility, how much you’ll lose in the next stock market crash, and your next statement.
You’re concerned about running out of money and how to turn your portfolio into dependable monthly paychecks that will last for as long as you, and your spouse, live.
You question whether you’ll earn a high enough rate of return on your assets.
If you’re a retiree and nearing retirement you could be making these big mistakes with your money.
#1 – Investing Your money like you did when you were younger and working
#2 – Not knowing how much risk you have in your portfolio right now, therefore not knowing how much you could lose in the next stock market crash
#3 – Riding out all stock market losses, believing you’ll always receive a 10 percent rate of return from the stock market if you hang on.
#4 – Not knowing how much income you can safely take out of your assets and how long your money will last
#5 – Not knowing the total fees you pay both direct and hidden, believing you’re paying 1 percent in fees when you could be paying 3 percent or more per year.
Annuities Can Generate Reliable Income, Though They Often Get a Bad Rap
When you think about financial planning and the money you’ll live on in retirement, stocks and bonds probably come to mind. These market-based investments are often in the spotlight, and it’s true that they can help you grow your wealth. However, it’s also true that they may a number of downsides, one being that growth is unpredictable. This means that if you’re approaching retirement, or you’re already retired, one poorly timed downturn in the market could greatly set you back or even lead to you running out of money in retirement.
Since risk is inherent in investing, many people look for safer options. However, things like checking accounts or even high-yield savings accounts may not be the answer. Though they won’t lose money in a technical sense due to FDIC insurance, the value of your savings may still erode over time due to inflation.
So, what’s a savvy saver to do? One potential option is an annuity. If you’d like to save for retirement and create a guaranteed income stream – one that isn’t directly tied to the markets – a fixed indexed annuity offers an excellent option for consideration. Unfortunately, annuities get a bad rap because of misinformation, stereotypes, and myths. Below, we’ll tackle five of the most common reasons people hesitate to consider annuities as a viable retirement income option.
