Let Me Help You Answer The Important Questions About Monthly Income
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The Income for Life Model® is an investment strategy with the objective of providing inflation-adjusted income for life. It provides you a personal plan for creating your retirement income.
Source: The Gallup Organization
Source: LIMRA, 09/23/13
*Past performance does not guarantee future results. S&P 500 is an unmanaged index of 500 widely held stocks. Inclusion is for illustrative purposes only. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary.
Individuals often chased performance and became integral players in momentum driven markets.
With the average mutual fund position held for just three years, investors did not give their investment decisions sufficient time.
Source: DALBAR, 2012
Many investors succumbed to emotionally-based decision making driven first by greed and then followed by fear.
A formal income plan should incorporate each of your sources of income. Social Security? Certainly. It's a key issue. But it should also consider your retirement savings. And any pension benefits, annuities, or other income-producing assets you may have. The income plan should take into account if you expect to keep working. If so, how much will you expect to earn? And how will your earnings potentially impact your Social Security retirement income?
Achieving the dream of a secure, comfortable retirement is much easier when you plan your finances.
Source: Social Security Administration
A major decision- when to claim Social Security retirement benefits- should be a key part of the plan. Will it be better to use your savings as a bridge, enabling you to lock-in higher monthly benefits by waiting a few years? Or, would you prefer to claim benefits as early as possible. As you begin your retirement journey, you'll have to answer a number of key questions. Consider each in the context of having a formal, written plan for creating your retirement income.
These realities are sure to create stress for many retirees as they seek ways to make their retirement income last as long as they do.
With fewer companies providing traditional pension plans, retirees are being forced to assume the investment risk associated with their retirement assets. They have more control than ever before, but they also face more risks.
Widespread uncertainties about the future of Social Security continue to linger. Increasing budget deficits and general financial uncertainty only serve to create additional anxiety for retirees. In addition, interest rates are at levels not seen since the Eisenhower administration. This has reduced the potential current income gained from savings vehicles.
Many retirees are thus challenged to find ways to boost levels of current income without taking on undue risk. All of these factors combine in a way that causes retirees to seek investment choices that offer safety but also provide growth opportunities to meet their income needs today, and tomorrow.
Source: Annunity 2000 Mortality Table. Society of Acturies.
One popular approach is to allocate your deposit to six "segments" that will hold invested assets ranging from very conservative to aggressive. Segment one, the most conservative, receives the largest portion of your deposit - 28%. Successive segments receive 26%, 20%, 13%, 7% and 6% (total, 100%).
The segments receiving the smallest amount of money are those which hold progressively more aggressive assets. The more aggressive an investment, the more risk it is subject to. These segments will be held for the longest period of time in order to achieve the best possible chance of excellent investing results.
Segment six is shown as a hedge against you living beyond twenty-five years from the date of inception. If that segment meets its projected rate of return, it will hold sufficient assets to continue an income stream.
At your death, any remaining assets will pass to your beneficiaries.
HTS adds an "income floor" under the segments. An income floor is a source of retirement income that is both predictable and expected to last a lifetime.
One popular approach is to purchase a ten-year, deferred income annuity that provides for a lifetime, guaranteed income. In this way, beginning in year 11 an additional guaranteed income source will be added to the strategy. Importantly, guarantees are based upon the issuing insurance company's claims-paying ability, as well as upon compliance with product requirements. And purchasing an income annuity reduces the liquidity available in your income strategy.
There is no assurance that any strategy will meet its investment objective.
Annuities are long-term investments that are for retirement purposes.