Wednesday, March 28, 2012

Retirement - Is it in YOUR future?

Everyone knows the saying "time flies", but I don't think anyone fully understands the irony of the saying until they reach age 50 and beyond.  Why 50?  For most Americans in this day and age, 50 marks the new half-way point in our lives from a longevity viewpoint.  The expected lifespan of a healthy individual is now 85+, however, the average expected retirement age is still 65.  Granted, this was before the 2008-2009 belly-flop of the stock market and global economy.  But consider the traditional working years from age 25 to 50 an uphill climb assuming steadily increasing earnings which comprise a duration of 25 years.  Also assume that a traditional savings plan of some type (401K, 403B, IRA, etc.) is employed during those years amassing a retirement account of about $150,000.00, AFTER the stock market melt-down.  Now at 50 years old, assuming a traditional retirement age of 65, an individual has 15 more years of earning and saving to grow the retirement account (in the current low interest rate, volatile stock market environment) to a level capable of sustaining them another 25 years...with only "Social Security" to add to their income.  It brings to mind another saying, "when pig's fly"!

It's possible the stock market could not only rally, but begin another upward and sustained slope that would last 10 to 15 years, but smart money wouldn't bank on it any time soon.  So what does that mean for 72 million Americans approaching retirement in the next 14 years?  For many Americans time didn't just fly by, it actually reversed their retirement account balances.  It's a reality that will require readjustment of retirement goals and timelines, lifestyle changes, and a reallocation of assets into more conservative investment vehicles with guarantees of lifetime income.  Guarantees?  Remember the defined benefit plans companies used to offer their loyal, long-time employees, also known as pensions?

Companies stopped offering pensions in the form of defined benefit plans once they were able to offer defined contribution plans, also known as 401K plans.  The change not only saved companies a lot of money, it let them off the hook for the responsibility of managing your pension dollars to ensure your income in retirement.  The problem was that 401k plans didn't, and still don't offer any guarantees of any kind to insure the safety and growth of your savings.  The assets are almost always 100% invested directly in the stock market and have no form of protection from volatility.  Add to that the lack of investment knowledge and training most employees participating in the 401k plan have and it's a small wonder that so many retirees and pre-retirees are bewildered at what happened to their retirement savings.

Unfortunately, there is no magic bullet or spell to turn back time, but there are alternative investment options that can help leverage the money you have set aside for retirement.  Depending on your age, account balance, income, and time left to grow the account, you may be able to set up your own pension with an annuity that includes a GMWB (guaranteed minimum withdrawal benefit) or LIBR (living income benefits rider).  It may be just the vehicle needed to help recover the income producing value of your retirement assets.  To learn more about some top rated annuity products with features designed to protect your investment from volatility and guarantees for lifetime income, visit my website at:

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