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Insuring a Retirement Income StreamWorking Americans may not be saving enough. That's the conclusion of one study of retirement nest eggs, which found that workers will have about 60 percent of their pre-retirement income when they retire.
Rather than risk relying on funds that may or may not be available, there is a strategy to help "insure" a portion of your retirement income. Insurance is a fairly common way to help protect against the risk of financial catastrophe. In fact, most people who are serious about protecting wealth would find it unthinkable to go through life without health, life, auto, and homeowners insurance. Insurance-Based
Contract Fixed annuities are flexible vehicles that can be structured to meet your individual needs. For example, you can choose payouts for life or a specified period. This means the income might last as long as you and/or your survivor live. Most annuities have surrender charges that are assessed during the early years of the contract if the contract owner surrenders the annuity. In addition, if the contract is surrendered before you reach age 59½, the funds may be subject to a 10 percent federal income tax penalty. The guarantees of fixed annuities are contingent on the claims-paying ability of the issuing company. If you would like to add an income stream with certain guarantees to your retirement portfolio, you may want to take a closer look at fixed annuities. Call to discuss specific strategies to supplement your retirement income. 1) The Wall Street Journal, June 8, 2005 |
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Unfortunately,
the data revealed that personal savings will provide only 10 to 20 percent of
this income.¹ And that may be cause for concern, considering that the remainder
of retirement income generally comes from pension plans, which fewer people
have, and Social Security benefits, which merely supplement retirement income
and may be lower if reforms to the social insurance program are implemented.