“I want steady retirement income but I can not afford to lose any principal”.
This is the number one concern we hear about retirement security.
“No Losses and Income I Cannot Outlive”.
People do not want to lose principal and they want guaranteed income for life. It is helpful to think about the difference between accumulating assets in retirement versus guaranteed, lifetime income. Until retirement, we focus on growing our assets. That makes sense because the more assets we have, the more income they can generate.
Decumulation is the fancy word for distributions. Professors and economists are finally asking us to re-think the conventional wisdom concerning asset accumulation versus lifetime income. Like so many things in financial planning, each person’s circumstances are unique. It is that very uniqueness that drives product decisions and risk tolerance. Factors such as heirs, health, other assets and income sources all play a role in how we feel about converting assets to income. For those who decide income for life suits them better, using the right annuities will let you have the best of both worlds:
“Equities, nor bonds, provide guaranteed income for life. Income annuities do guarantee that you will never lose principal. For retirees who want to protect IRA assets and other retirement assets from market loss, you will be surprised by how much income they generate. Indexed annuities do two important things every investor wants. They protect the downside and they share in the upside when indexes increase in value.
You can reach Ted Bernstein at Life Cycle Planners, 561-869-4500 or email Ted to arrange for a consultation by phone or in person. If you are tired of seeing your retirement assets being whipsawed in the markets, let’s talk.
Also published on Medium.