What me worry about retirement? Why?

By 2010, in less than 30 months, the US Census Bureau estimates that there will be up to 214,000 centenarians ( one who is 100 years old or older) living in the USA (U.S.Census)

So I guess if people worked 45 years, got a paycheck regularly and barely managed to make it to retirement at age 65, a substantial number of those individuals will have to figure out how to survive for at least the next 35 years (to age100), without getting any paycheck!

Perhaps it's time to look into some Prepaid Retirement.

Alex Weiss, co-founder
www.WealthBuilderUniversity.com

Comments

[Steven T Duplain]

You make an excellent point, but for many older Americans another important question is...

...Where to put the money?...

This is one of the most important financial decisions baby boomers will ever face as they reach retirement age and are required to take a lump-sum distribution from retirement funds such as 401(k)s, 403(b)s and similar pension plans. The first baby boomers turned 60 in 2006. Behind them are approximately 75 million more Americans who for the next 19 years will lay claim to the title senior citizen. For those boomers who have salted away an estimated $13 trillion dollars in retirement plans, a lump-sum decision could range from starting a new business to rolling over their retirement plan into an IRA to shield those funds from the taxman.

Keeping their hard-earned retirement funds out of the hands of Uncle Sam will be the process preferred by most boomers. Rolling over those funds into an IRA, the typical boomer will face myriad investment options. Many if not most of these boomers have been educated during their working years on how to efficiently accumulate dollars. They have learned such familiar concepts as pay yourself first, dollar cost averaging, getting the highest rate of return, and diversification. To have a successful retirement, however, a whole new set of skills are required. The biggest concern for most boomers at retirement is how to utilize the dollars they have accumulated to create a guaranteed income they cannot outlive. With many people living healthy, vital lives well into their 80’s & 90’s, the focus must shift at retirement from growth to lifetime income and efficient tax strategies.
Some Key Questions are:

1. What vehicles produce guaranteed lifetime income?
2. How can I minimize the effect of taxes and inflation on my retirement income?
3. Am I properly utilizing all of my assets for maximum retirement income?

Answering these questions and finding appropriate solutions and strategies could be the difference between a retirement worrying about money or a retirement focused on challenging and enjoying this phase of life.

[Alex Weiss]

Good thoughts Steve. Sounds like you have experience in this area.

When you mention "guaranteed lifetime income", what's the vehicle you are considering ?

Alex

[Steven T Duplain]

Fixed Annuities have been used for many years to generate guaranteed lifetime income. Traditionally in order to accomplish this you would have to “Annuitize” either the entire account or the portion of the account that would be used to generate income. If the owner of an annuity chooses to annuitize they trade the right to access the dollars in the account for the right to receive a monthly income for the rest of their life based on life expectancy and a current interest rate.

More and more insurance ompanies, however, are offering the ability to take advantage of guaranteed income without having to Annuitize. In the past year these plans have become increasingly popular as they offer the security of guaranteed income while retaining the flexibility to access the dollars in the account if the needs of the annuity owner change.