Is your retirement income protected? Nine questions to ask


Asking the right questions can help make sure your long term investment is secure. courtesy of Monkey Business/stock.Adobe.com

When it comes to retirement planning, anxiety comes with the territory. Will you be able to maintain your lifestyle in retirement? Will you have enough to cover your monthly bills without depleting your savings? Are you at risk of outliving your money? While such concerns are common among Americans approaching retirement, protecting part of the money that you’ve saved to ensure monthly income for life can make a difference in your confidence about the future, suggests a new study.

A new survey by the Alliance for Lifetime Income looked at the emotional and physical well-being of Gen X and Baby Boomer households and compared those with some form of protected lifetime income, such as an annuity and/or pension, to those that were unprotected and relying solely on savings and Social Security.

Eighty-eight percent of protected households say they are confident that their retirement money will help them achieve their lifestyle goals, while only sixty-three percent of unprotected households feel confident.

“The American retirement discussion has traditionally focused on accumulating assets rather than how to turn some of those savings into a guaranteed monthly income that will last as long as you do,” says Colin Devine, educational advisor at the Alliance for Lifetime Income. “People don’t realize that Social Security is estimated to replace only about 40 percent of the average person’s income, which leaves millions of Americans vulnerable to outliving their hard-earned savings.”

To get confident about your financial plan for retirement, Devine says that you should understand all your options for protecting a portion of your retirement income from the impact of market volatility and longer lifespans. 

The Alliance outlines nine key questions that you should ask your financial advisor to make sure that you’re on track to having the lifetime income you can count on for the retirement you want:

 

1. Why is protected monthly income in retirement important?

2. How much protected monthly income will I need in retirement?

3. What if my expected monthly income is less than what I need to last my lifetime?

4. What is an annuity?

5. Are there costs associated with guaranteed protected income?

6. What if I need access to my money in an annuity?

7. Can annuities help protect me from investment losses?

8. How do I know that my protected income is safe?

9. Are there other strategies for protected monthly income?

 

“Discussing these topics with your financial advisor can help you become better informed about your income planning options, putting you one step closer to creating a financial plan that delivers what you need to live the life you want in retirement,” says Devine.

Don’t succumb to anxiety about your financial future. With the right knowledge, you can help ensure a comfortable retirement. (StatePoint)

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