Worried about Retirement? No Pension? Generate Guaranteed Income through an Annuity by Warren Elkin, Lifetime Retirement Income Planning

Annuities with Lifetime Retirement Income Planning

Annuities with Lifetime Retirement Income Planning

The changes in corporate America, even before the economic downturn 2008, pointed to a time when fewer retirees would have a company pension to rely on.

Today, workers must rely on funding their own retirement accounts, hoping that cash-strapped employers will match such contributions in the 401(k) right up to the door leading to retirement.

For many investors, the fear of not having a stable, income-producing retirement portfolio can be palpable, but not without hope: Capturing a guaranteed income stream, even in down markets, is possible through an annuity and a very viable source for retirement income.

“How to create your own pension plan,” an article on Inc.com, offers the investors a guidepost on as to why the annuity is a much-needed anchor in today’s retirement portfolio: Young, old or already reaching retirement, readers can benefit from his overview.

Why an annuity is not like your 401(k)

Many workers contribute monthly to their company’s defined contribution retirement plan, which can be a Roth IRA or the 401(k).  Money invested in within these accounts are not a source of guaranteed income. But purchasing an annuity becomes a contract with the insurance company to pay you a given amount—regardless of how long you live!

Annuities mirror pensions in many ways

The main takeaway in making this comparison is knowing you can rely on this insurance product to payout a minimum guarantee, an income stream that keeps on paying in the worst of times…much like a pension would do.

For sure, an annuity is a welcomed option in today’s post financial crisis.

Make sure you have all the facts necessary to make the right decision with your financial future by calling us today! We can help you with information regarding Annuity, Annuities, Fixed Annuity, Fixed Annuities, Variable Annuity,Variable Annuities, Immediate Annuity, Immediate Annuities, Income Annuity,Income Annuities, Deferred Annuity, Deferred Annuities, Index Annuity, Index Annuities, 401k Rollover, IRA Rollover, Retirement Income Planning, Immediate Fixed Annuity, Immediate Fixed Annuities, Annuities Calculator, Deferred Variable Annuity, Immediate variable Annuity, Immediate Income Annuity, Immediate Income Annuities, Deferred Variable Annuities, Best Fixed Annuities,
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Speak with us now at 877-476-5051, email Warren at warren@warrenelkin.com, or go to www.LifeTimeRetirmentIncome.com to learn more about Warren Elkin of Norhill Financial and his unique process to make sure your financial decisions are made in your best interest.

The Why, When and How of Consolidating Your Retirement Accounts

Consolidate: To combine separate items or scattered material into a single whole or mass.  The definition makes consolidation seem tidy, productive and even a bit powerful.  With all those good vibes, it’s a wonder why more people hesitate to use consolidation tactics in their lives, especially in terms of their retirement.  Many people have multiple retirement accounts through multiple different custodians with multiple different terms.  That is a lot of “separate items or scattered material” that can be combined into the “single whole or mass” that consolidation affords its users.  So if you are one of those people, it’s time you look into simplifying your retirement plans and consolidating those accounts. But you might ask yourself, why consolidate?  Or when is the best time to consolidate?  Or how do you actually go about consolidating?  Well, since you asked…

Why
The essential of why you should consolidate is best described by a demonstration.  Take a piece of paper at your desk, and now rip it in half (make sure it’s not your paycheck before you start the ripping stage).   Now grab a stack of 15-20 papers and try to tear that in half.  More difficult, right?  Materials are stronger when grouped together, we know that.  What most people don’t know is that when it comes to retirement accounts, grouping them works in essentially the same way.  Your financial position is much stronger when each investment isn’t standing individually.  Having multiple accounts leaves you at the risk of portfolio duplications in which similar investments have similar objectives and they overlap, wasting your assets with unnecessary risk.  Fees can be avoided and paperwork is simplified.  Also, by combining into one account, you are better able to adjust your investments in reaction to market changes by simply accessing one account.

When
The question of when is less about timing, and more about in what situations it should be used.  Consolidation is an advantage to almost anyone who is looking for a simple and productive retirement plan, but there are certain instances in which it is a good strategy to apply.  For example, when many people leave a company, they leave their retirement funds that that company’s 401(k) or pension plan.  This is a great opportunity for consolidation as you can roll those funds into your IRA to increase your existing investment selection while also minimizing the number of accounts you have to manage.  It’s also important to understand the investment options available for different types of investments.  For example, Rollover IRAs have nearly unlimited investment choices, while 401(k) plans are limited to usually a maximum of 25 choices.  The more options you have, the more flexible your plans are, and the better off you are.  You also must understand which accounts are available for consolidation.  All traditional IRA’s can be combined, both deductible and non-deductible, but a Roth IRA cannot be combined with a traditional IRA.  Make sure you understand these stipulations before you make your decisions.

How

Here is the meat of the issue, how to go about this consolidation process.  With this there is good news, and better news.  The good news is that most of work involves information you already have.  The better news is that all you have to do is take that information and follow these simple, step by step directions and you will be well on your way.

The first step is to make a list of each of your individual accounts that you hold currently.  In this list, include details on each account such as the type of account it is, the current balance, its recent and long term performance, as well as any fees associated with it.  Next you need to think about and plan your retirement goals and investment philosophy.  The third step is to determine the plan or institution that best fits those goals.  After that, you start to combine your accounts into the institution and plan that you chose.  This should begin with you smaller accounts, followed by the non-performing accounts and accounts with high fees.  Continue this until all your accounts have been rolled into one.  Then take all of your funds and determine the specific investments needed to reach the goals that you set earlier in the process, all in one tidy account.  Then bake at 375 degrees until golden brown.  Just kidding, but in all seriousness if you follow these steps, consolidating your retirement accounts can be as easy as baking a cake, probably easier for most of you.

When it comes to your retirement, it’s important to find ways to work smarter, not harder.  Consolidating your accounts is one of the simplest ways to do that.  Combine your accounts, limit your paperwork and strengthen your investments.  Aristotle once said, “The whole is greater than the sum of its parts.”  It’s pretty unlikely he was speaking specifically about your retirement accounts, but you get where he was going.

Photo Courtesy of: mybanktracker.com

Are Annuities a Key To Your Future?

With the future of pensions up in the air, Social Security on thin ice and 401(k) fees causing concern, more and more people are turning to other types of funds to lead them into retirement.  One of their attractive options? Annuities.  Unlike other investments, annuities are held through the insurance industry and are known for their flexibility which is lacking in many other funds.  For some people these annuities are their main investment, others use them simply as a surplus income.  Retirement plans are different amongst everyone, but there are a few reasons why you should be giving annuities a second look.

  • Flexibility-  As mentioned, Annuities offer more flexibility than most other retirement funds.  In your career, you went to work every day and earned money.  In your retirement, it may seem like you wake up every day and simply spend money.  Vacations, family get togethers, shopping trips, etc.  It’s important to ensure that you have money coming in that can cover those expenses.  One of the most popular annuities is a Single Premium Immediate Annuity (SPIA) in which one lump sum payment guarantees you a monthly paycheck for as long as you wish it to last.  It simply acts as a pension plan organized and determined by your wishes.
  • Lifetime Payments-  With the life expectancy rates seeming to climb every day, one of the biggest risks of retirement planning is longevity.  Many types of funds can leave holders worried whether the income will last them for their entire lives.  Of course pensions and Social Security are a lifetime option, but the future of both of those funds is beginning to be questioned by many.   The SPIA is one of the only options that ensures lifetime payments.  The payouts of a SPIA are determined by your age, interest rates, and time of purchase amongst other factors.  Additionally, holders can determine whether they want the payments to cover a single life of married couple.  They offer the longevity needed paired with the flexibility preferred.
  • Avoiding Risk-  Everyone saw the devastating effect a market turn can have on the investment portfolios of recent and soon-to-be retirees.  It can be a scary thought for anyone approaching that age.  Annuities, with all their options and flexibility, offer a security from these market effects without enduring the poor interest rates in options such as money markets.  Certain annuities protect your principle while investing in stock mutual funds, while others put your money in the market but guarantee your investment won’t dip below your original input.  It’s quality peace of mind with the opportunity for growth.

With all the advantages of annuities, some people might run out the door and get themselves one ASAP, but there are certainly other things to consider before making any moves.  Because of the options and flexibilities involved with annuities, they can be confusing and technical in terms of their contracts.  Before you put your name on the dotted line, make sure A) you have an advisor you can trust and B) you get all of your questions answered.  Ask about commission fees, fees for early withdrawal and surrender charges.
Another danger lies in interest rates, which can often have a great effect on the size of the payments you receive each month.  The current interest rate is one of three factors determining the payment size, but it does have a significant effect on monthly changes.  Try to find annuity options with a guaranteed interest rate that you know you can count on.
With all the changes shifting through the retirement funds and what seems to be the beginning of the end of pensions, annuities are becoming an attractive and viable option for most retirees.  Even if people aren’t ready to abandon the more traditional offers, annuities can provide a comforting supplemental income.  Take the time to look at the options of annuities and see if they could benefit you.  It could pay off later.

Photo Courtesy of: montague.net