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CHARACTERISTIC – Do you rely on forecasts based on future conditions when planning retirement, or do you plan your retirement based on guarantees? Both answers can be correct. It all depends on your situation and the length of time you are focused 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 on US (or foreign) stocks only, the volatility factor needs to be taken into account.
But how selected stocks develop over time and how easily they can be converted into a retirement account to finance a desired level of income depends on external influences, such as the general world economy, the valuation of the dollar, inflation or deflation and the point of view Third on the earnings results of the stock.
A group of top equity strategists can predict anything from a single-digit loss to a double-digit profit.
You may be asking yourself the following:
- 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 major retirement funds could be a poor choice. Again, it all depends on your situation.
Many people lose sight of the ultimate goal of retirement planning, which in its most basic form is to keep retirement income as long as possible. This seems like a relatively simple goal, so why do so many people start out with a retirement income strategy that leaves so much to chance?
Let’s look at the selection again by category: one is an estimate and the other is a guarantee. Depending on the asset and the desired lifestyle, there may be room for both types of planning. It is crucial that the essential expenses are met first and financed entirely by lifelong sources of income.
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You will enjoy some significant benefits when your lifelong sources of income are sufficient to cover the essential costs of living. The question and the problem are the same: how do you do this?
First of all, you should avoid the risk of market volatility and accept a reasonable rate of return.
New studies show that given a choice, most people would prefer secure income to returns. When the money has to be there and the income essential, security is the first decision. This type of income planning eliminates the possibility of surviving your source of income – or what is known as the longevity risk. Knowing that your essential expenses are covered by a guaranteed source of income is a great convenience and a sense of freedom to enjoy your retirement years no matter how long you live.
With all the uncertainties, unpredictable results, and the endless list of “what-if” investors, it’s no surprise that drawing up an accurate roadmap for how financial markets will move is not an easy task – even for the Wall- Street players who admit this have too many variables that we cannot absorb and predict.
For this very reason, it is a top priority for retirees or retirees to understand the risk they face without having a guaranteed retirement income solution in place to mitigate the risk of lack of money.
Let’s take a look at the state of the American pension system.
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A generation ago, more than 4 in 5 private sector workers were offered pension plans. Today it’s less than 1 in 3. An employee has mostly replaced retirement plans like 401 (k) s, 403 (b) s, or 457s.
The expenses included in many of these plans make it difficult to earn the cash needed to finance basic needs in retirement. The weaknesses of this approach can be seen in the lack of guarantees – a significant factor when looking at current historical market volatility. In addition, there has been government scrutiny of new knowledge about how fees are charged and the real cost of owning these plans.
Fortunately, there are solutions that can potentially increase income and result in a lifelong annuity payment to both spouses with the benefits of protection and guarantees.
How can this be achieved?
Of course, by handing the risk of managing your significant retirement funds to a risk taker, such as an insurance company.
Since the Presbyterian Church first invented pensions nearly 300 years ago, pensions have been the cornerstone of the significant retirement incomes of millions of retirees. With the development of new and dynamic products, a guaranteed income with annual credit in the range of 4-7% is available.
Avoiding the risk of retirement planning by letting an insurance company manage your retirement accounts can give you a stress-free and secure future.
Copyright © Lyle Boss, all rights reserved.
Lyle Boss is a member of Syndicated Columnists, a national organization committed to a completely transparent approach to money management. As an asset protection instructor, he has helped thousands of seniors find their financial retirement options. Its clients include government employees, teachers, doctors, farmers, and business professionals, to name a few. Boss has been actively teaching advanced estate planning and wealth preservation for more than 20 years in locations like the University of Utah and in over 200 Senior Retirement Consumer Education Workshops throughout Utah, Idaho, and Wyoming. Boss and his wife Deanna live in South Ogden and St. George, Utah.
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