Is your retirement income based on guarantees or assumptions? – News from Saint-Georges


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CHARACTERISTIC – When planning your retirement, do you rely on projections based on future conditions or do you plan your retirement on guarantees? Both answers can be correct. It all depends on your situation and when you are focusing on retirement.

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Let’s start with a projection or estimate of future value planning. If you are basing your future retirement income solely on US (or foreign) stocks, the volatility factor should be included.

But the performance of selected stocks over time and the ease with which they convert into a retirement account to fund the desired level of income depends on outside influences, such as the global economy as a whole, the valuation of the dollar. , inflation or deflation, and a third party’s opinion on the stock’s earnings results.

A group of leading stock market strategists can predict everything from a single digit loss to a double digit gain.

You can ask yourself the following questions:

  • How do you plan your future retirement income?
  • Who do you trust?
  • How do you estimate future market values?

Experimenting with discretionary funds is one thing, but large retirement funds could be a bad choice. Again, it all depends on your situation.

Many people lose sight of the real purpose of retirement planning, which in its most basic form is to make retirement income last as long as possible. It seems like a relatively simple goal, so why do so many people start with a retirement income strategy that leaves so much to chance?

Let’s take the choices by category: one is an estimate and the other is a guarantee. Depending on the value of the assets and the desired lifestyle, there may be room for both types of planning. The key is that essential expenses should be covered first and fully funded from income sources for life.

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You will enjoy significant benefits if you have sufficient sources of income for life to finance essential lifestyle expenses. The question and the problem are the same: how to do it?

First, you need to avoid the risk of market volatility and accept a reasonable rate of return.

New studies show that if given a choice, most people would choose secure income over returns. When the funds need to be there and the income is critical, safety becomes the first decision. Having this type of income planning eliminates the possibility of outliving your source of income – or what’s called longevity risk. Knowing that your necessary expenses are covered by a guaranteed source of income is a great comfort and a feeling of freedom to enjoy your retirement years, no matter how long you live.

Given all the uncertainties, unpredictable results, and the endless list of ‘what ifs’ investors face, it’s no surprise that charting an accurate roadmap for where the financial markets are heading is not. an easy task – even for Wall Street players who admit that there are too many variables beyond our absorptive and predictive capacities.

This is precisely why it is critical for retirees or about to retire to understand the risk they face without having a guaranteed retirement income solution in place to mitigate the risk of running out of money.

Let’s take a look at the state of the US pension system.

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A generation ago, pension plans were offered to more than 4 out of 5 workers in the private sector. Today it’s less than 1 in 3. One employee has mainly replaced paid retirement plans like the 401 (k), 403 (b) or 457s.

The expenses built into many of these plans make it difficult to earn the money to fund basic retirement needs. The shortcomings of this approach are evident in its lack of collateral – a critical factor considering the current historical level of market volatility. Additionally, new information on how fees are billed and the actual cost of owning these plans has undergone regulatory review.

Fortunately, there are solutions that can potentially increase income and generate a lifetime pension payment to both spouses with the benefits of protection and guarantees.

How can this be accomplished?

Of course, by transferring the risk of managing your large retirement funds to a risk carrier, such as an insurance company.

Since the Presbyterian Church invented annuities almost 300 years ago, annuities have been the cornerstone of the important retirement income of millions of retirees. With the evolution of new dynamic products, a guaranteed income with an annual credit of around 4 to 7% is fully available.

Removing the risk from planning for retirement by allowing an insurance company to manage your retirement accounts can give you a secure, stress-free future.

Copyright © Lyle Boss, all rights reserved.

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