Posted by Retired, is the money enough?
No matter when we choose to retire, we will face the same problem:Will the money be enough for a lifetime?
Actually this is a math problem, what is known is thatAsset value and desired lifestyle at retirement;What is unknown is thatCan we live a long life? Can these two conditions be maintained until the day when the sea is dry and the stone is destroyed?
This isAnnuity InsuranceTime to make full use of it.
Social Security Retirement Annuity = Government Annuity
First of all, the Social Security Income (SSI), which is part of the US national welfare, appeared on the scene.
The SSI name is very high-sounding. In fact, we have been forced to pay in our payroll for the past few decades.Annuity Insurance.According to the US Social Security Administration, last yearThere are 6900 million Americans, After receiving this self-paid government annuity insurance1.
However, it is a pity that the amount that can be received from SSI is limited, and generally only the most basic living expenses can be maintained.The U.S. government also wrote very clearly in public documents:"Don't use SSI Social Security Pension as your main source of retirement income".
The government’s annuity insurance is not enough, so the remaining cost of retirement can be usedBusiness annuity insuranceCome to supplement, in order to achieve the purpose of carefree in old age.
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Give a chestnut
Lao Qiang plans to retire at the age of 67, 401K when he retires, and the estimated value of assets such as investment accounts and IRA is 130 million.
He also knows that SSI will give $3,166 a month, and the living expenses at retirement can also be estimated.
The usual living expenses, medical insurance when you retire, and a few good dream day trips to realize the travel to places that you thought of when you were young but have not been to all your life, plus the messy taxes that you can’t escape... this life Quality, at least $6,000 per month.
I haven't mentioned that I want to save some money for Xiaoqiang.
Lao Qiang’s question is here:The $2,834 in the middle of each month can be converted from $130 million, without tossing, without worry, and maintaining it until the age of senility or longer?
"No tossing" retirement annuity insurance plan
One solution is to buyImmediate income annuity (Immediate Annuity).Immediate income annuities are the most primitive but heart-warming products in the annuity insurance category. The insurance company will calculate the amount of pension received each month according to the premium and age you paid.This amount is the same as the SSI Social Security Pension, which can accompany you until you are old.
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In accordance with the development of the times, the current income annuity is also evolving with the trend to meet the needs of different retirement policyholders.For example, if Lao Qiang wants to save some money for Xiao Qiang after he is old, he can buy it.Immediate income annuityTime,Add a beneficiary clause.Which one is right for you, you need to cooperate with a professional annuity insurance brokerage consultant to achieve the purpose of tailoring.
Worried about stopping the flow, retiring without rest
Having said that, the old strong is very lucky. He has worked for several decades. By the time he retires, his various assets and accounts will add up to 130 million steadily.
Lao Qiang’s problem now is,I have reached the age, but I have not decided to retire yet. I am worried that the money will be enough in the future?
If he plans to retire when he is in his middle age, is there any way to avoid this problem?
Assume that the middle-aged old man has a monthly surplus of $2,000 to invest in his investment account.When he was 55 years old, the money in his investment account was quite impressive, but as his retirement approached, his attitude towards this money was different.
At this time, the old strong will start to figure out how to makeMoney grows steadily, To achieve a happy retirement life.Specifically, he hasUnable to accept the stimulus brought by stock market fluctuations, Or the fact that the money was not made, but the management agency unmovedly deducted the expenses from his account.Put it in the bank for interest, the interest is really low.Watching this depreciation following inflation,Mentality is unstable again.What about this?
Used for accumulation type annuity insurance (such as:Multi-year guaranteed income annuity.Securities Annuity.Index annuity), will be the choice of the old strong at the age of 50-55.
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The middle-aged strong choice: accumulation type annuity insurance
This kind of cumulative annuity is designed by insurance companies.Products for the purpose of investment appreciation and with tax deferral function.
According to the different investment return benchmarks selected by the policyholders, the accumulation annuity can be further subdivided intoFixed income annuity (Fixed Annuity),Investment income annuity (Variable Annuity), andIndex Income Annuity (Index Annuity).
Investment income annuityThe risk is high, and the Department of Labor (DOL) has issued restrictions a few years ago. Because the risk attribute of the product deviates from our position on "insurance", this product will not be discussed yet.
Fixed income annuityIt is very similar to bank time deposits,The rate of return is measured by the annualized rate of interest.Insurance companies will use your premiums to invest in high-quality corporate bonds to ensure the rate of return.This kind of bond investment often has the characteristics of quantification and high return, so you will get a higher rate of return than bank fixed deposits, and it has the function of fixed deposit guarantee.
Index-income annuities have the characteristics of fixed-income annuities. The difference is that the rate of return is measured according to the index movement (usually the Standard & Poor's 500 Index S&P500).And unless you want to choose some special additional terms,There are no fees for these two annuities.
Therefore, both "fixed income annuities" and "index income annuities" have "Drought and flood guarantee income without losing a penny"The function, and the rate of return will basically far exceed the interest on bank deposits.
In an economic environment with low interest rates,Index returns tend to be higher than fixed income,and soIndex Income AnnuityIn recent years, it has been the finale to the audience and has become the most popular type of accumulation annuity.If Lao Qiang chose an index-income annuity in the past ten years, it would not be a dream to secure 130 million (or more) when he retires.
Article summary
Just like other financial products, annuity insurance may not be suitable for everyone.But understand annuity insurance in advance"Stable income, accompany for life"The characteristics of this will allow you to have a more comprehensive understanding of your retirement income plan in advance. The flexible use of these financial tools can reduce your financial worries in your later years. (Finish)
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appendix
01. "Fast Facts & Figures About Social Security, 2020", 2020, Social Security Office, https://www.ssa.gov/
