The more one reads about the fact that most Americans approaching retirement are way under provided for, and the fact that one’s retirement lifespan will be significantly longer than previous generations, the more concerned one becomes about what folk out there are doing about providing for retirement, and what vehicles they are using to make the most out of what they have.
We think that it can generally be agreed upon that Social Security can only cover a small portion of one’s retirement income needs, and that one has to have savings to supplement this.
And where these savings are, and the degree that they can be relied upon to generate ‘income for life’ is what will determine the security and quality of one’s retirement.
Fixed Index Annuities offer an almost foolproof method of providing both stability and growth whilst also offering the ability of creating that elusive (but critical) ‘income for life’.
The concept of ‘income for life’ means that you can plan your lifestyle around a definitive number. It may mean that you have to curtail expenses to fit the income, but at least you have an income figure that you can plan around secure in the knowledge that it can be relied upon for the balance of your (and your spouses) lifetime.
Contrast this scenario with someone invested in the market anxiously watching the DOW every day and constantly stressing over whether they will outlive their savings.
With the one you have certainty; with the other uncertainty and stress which does not a happy retirement make! Certainly, if you have more money than you need for a secure retirement then it makes sense to have some invested where you are at risk, because you will definitely do better in a market upswing.
The current national plan for a savings account would be way better served if it was tied to a retirement vehicle that could be relied upon to provide an income for life, much as the old defined benefit pension plans did. The mess in which we currently find ourselves can be almost directly ascribed to the swing from defined benefit pensions which could be relied upon in retirement for lifetime income, to 401(k) plans which can certainly not be relied upon and were never intended as a pension plan substitute.
However you look at the current scenario, there is an indisputable and compelling case to be made for the use of Fixed Index Annuities as the base of a secure Retirement Plan.
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