How Much Money will you Need in Retirement?

Have you underestimated?

What is enough?  If you’re considering retiring in the near future, you’ve probably heard or read that you need about 70% of your salary to live comfortably in retirement.  This estimate is frequently repeated, but that doesn’t mean it is true for everyone.  It may not be true for you. Consider the following factors:

Spending Habits: Do you spend only 70% of you salary now?  Probably not.  If you’re like most, you probably spend 90% or more.  Will your spending habits change drastically once you retire?  Most likely not.  In retirement every day seems like Saturday and spending often is increased. 

Portfolio: Many people retire with investment portfolios they haven’t review in years, with asset allocations that may no longer be appropriate.  New retirees sometimes carry too much risk in their portfolios, which can result in wild income swings from the roller coaster effects of the market. Other retirees are super conservative investors, their portfolios are so risk adverse that they cannot earn enough to keep up with even moderate inflation, and over time, they find they have less and less purchasing power.

Heredity: If you come from a family where people frequently live into their 80’s and 90’s you may live as long or longer.  Imagine retiring at 55 and living to age 95.  Do you have an income stream that will last 40 years?

Health: Most of us will face major health problems at some point in our lives.  Think for a moment, about the costs of prescription medicines, and recurring treatment for chronic ailments.  These costs can eat away our retirement income, even with a great health care plan.

Will you have enough?  In retirement, woefully inaccurate financial assumptions may cause you to lose the independence that you've worked so hard to preserve.  Consider meeting with a qualified financial professional who can help estimate your lifestyle needs for the short and long-term. 

Cory Payne

Beehive Insurance Retirement Planning 

302 West 5400 South #101

Murray, Utah 84107

cpayne@beehiveinsurance.com

801-6856-6868

Why Do People Use Annuities?

People purchase annuities for Income.

Below are some quotes about annuities from Kiplinger, Harvard Business Review, CNN, CBS News, TIME.com and Fox Business.

 

Kiplinger: The need for lifetime income is huge and growing as life expectancy's continue to increase and traditional sources of guaranteed income disappear.  An immediate annuity is based on a simple concept: You give an insurance company a lump sum and it promises to send you a monthly check for the rest of your life – no matter how long you live. “Lock In Your Retirement Income”

Harvard Business Review:  Our Approach to saving is all wrong: We need to think about monthly income, not net worth….  Risk should be defined from an income perspective, and the risk free assets should be deferred inflation indexed annuities. “The Crisis in Retirement Planning”

CNN: The reason it is hard to duplicate an annuity’s payments is that annuities have a unique feature that allows them to pay more income than you can generate by investing on your own, “mortality credits”.  If you want a more assured income than Social Security alone can provide, then putting a portion of your savings into an immediate (or deferred) annuity may make sense. “The safest way to make your retirement savings last”

CBS News:  One way to avoid running out of money before you die is to by an annuity form an insurance company, which then guarantee’s you a monthly payment no matter how long you live and no matter what happens in the economy. “How long will your retirement savings last?”

Time.com: “Annuities sold through big insurance companies have soared in popularity as retirees have come to understand that guaranteed lifetime income makes them more financially confident – and happier too.  Securing at least a base level of lifetime income should be every retiree’s priority – at least if they want to live happily ever after. ”Lifetime Income Stream Key to Retirement Happiness”

Fox Business: By implementing a product allocation strategy combining annuities with a lifetime income rider and traditional portfolio strategies you vastly increase the chances of having sustainable income in retirement no matter if you live to be 85 or 105 years old. “The difference between investing and income planning”

Please contact me if you'd like additional information.

Thanks,

D Cory Payne

Beehive Insurance Retirement Planning Services

302 West 5400 South #101

Murray, Utah  84107

801-685-6875 Direct

801-685-2899 Fax

cpayne@beehiveinsurance.com

Insurance and annuity products are not sold through Horter Investment Management, LLC.  Horter does not endorse any annuity or insurance products nor does it guarantee their performance.  Owners of these products are subject to the terms and conditions of the policies and contracts of the issuing companies.  All product guarantees depend on the insurance company’s financial strength and claims-paying ability.