The Blunders of Retirement Income
Planning

When it comes to retirement planning, there are two trends that seem to define the changing nature of the game.

The first is the amount of Americans who are deciding to retire at a younger age, often before they have secured enough resources to ensure an ongoing income. The second is the startlingly high cost of long-term care, which has modern couples paying upwards of $300,000 on health care expenses during their retirement.

With these trends in mind, it is hard to believe that anyone is actually saving enough for retirement. Fortunately, getting yourself on track for a stable retirement income can be as easy as making a few small course corrections.

1.) Know Your Tax Liabilities

With so many Americans deciding to retire at an earlier age, the amount of people who are entering this stage of their life without the proper preparation is somewhat startling. In fact, many people do not even realize that almost all forms of retirement income are taxable.

Whether it is pension income, Social Security income, annuities distributions, or other forms in investment income, you are very likely going to have to pay at least some taxes. Your Personal Benefits Manager is a great resource for estimating your liability and making plans to minimize it.

2.) Withdraw Strategically

Another common mistake that we are seeing more and more is individuals withdrawing from their retirement accounts in the incorrect order. Whether you are working with an IRA, Social Security, or any other blend of accounts, taking your money out in the correct, strategically planned order can save you thousands in taxes every year.

This is especially true for people who have no pension and will be relying more heavily on an IRA and/or Social Security. Every dollar that you don’t have to pay in taxes is one that you can put to work for you.

3.) Make a Plan & Keep it Current

The difference between anxious about retirement and excited for retirement is a detailed, well thought out plan that takes full consideration of potential tax liabilities. And because your personal financial situation is subject to change at the drop of the hat, it becomes necessary to make sure that your plan stays updated and optimized. This is another area where enlisting the free help of a seasoned professional is probably a good idea.

4.) The ‘Secret Weapon’ of Retirement Income: Lifetime Annuities

The biggest fear most retirees have is running out of money, and for many, that will depend on how long they live.

Those who are fortunate to live to a ripe old age often face serious financial challenges. But there is a way to guarantee that your money will last as long as you do.

Lifetime Annuities work by allowing the consumer to invest an original lump payment into an annuity account, which then distributes that investment into monthly payments that are guaranteed to last for the lifetime of the enrollee. In the meantime, your original investment will be earning a higher guaranteed interest than available through banks or bonds.

Some annuities also offer options for spouse coverage, which ensures that your remaining benefits will transfer to your partner in the case of your death.

Your Personal Benefits Manager is Standing By

If you are interested in learning more about exactly how far you can stretch your retirement dollars with a Lifetime Annuity, your Personal Benefits Manager is standing by with both the experience and resources to make it happen. Give us a call at any time of day, or visit our website to schedule a consultation.

To your health and wealth,

Wiley P. Long, III
President – MediGap Advisors