My role is to help you know, at each point in retirement, how much you can spend. Before retirement, the ideal is to spend less than you make. However, during retirement, people do not usually know how much they can spend. My job is to make sure you use your resources well to live your best life.
Of course, you do not want to overspend; we will keep a sharp eye out for that. But in my experience, people often spend far less than they can in retirement. While they worry about running out of money, people often run out of youth and health.
While retirees often think the biggest risk is running out of money, they do not notice the risk of regret – regret that they did not take the opportunities they had when they could. I will try to give you permission to spend in ways that help you achieve your goals and live a fulfilling life without unnecessary anxiety.
Income guardrails technology allows for automatic adjustments to retirement income based on market performance and other factors.
This approach:
Adding income annuities to your retirement income strategy can complement and enhance the guardrails approach in several ways:
Income annuities provide a guaranteed income stream, which can serve as a stable foundation for your retirement plan:
This guaranteed income can cover essential expenses, reducing reliance on portfolio withdrawals for basic needs.
The certainty of annuity income can provide peace of mind and financial security, especially during market downturns.
Incorporating annuities allows for more flexibility in managing the rest of your portfolio:
With essential expenses covered by annuity income, you can potentially take more risk with your remaining investments.
This may allow for higher growth potential and potentially higher withdrawal rates from your non-annuity assets.
Income annuities, particularly those with lifetime payout options, provide insurance against outliving your assets:
This addresses the longevity risk that the guardrails approach alone may not fully mitigate.
Lifetime annuities continue to pay regardless of how long you live, reducing the stress of managing withdrawals in very advanced age.
Social Security is the foundation of a secured retirement, providing inflation adjusted income for life. But on average, it replaces only about 40% of pre-retirement earnings and even less for higher income earners. To have a comfortable retirement people also need other sources of income such as a pension, retirement savings, home equity or a job. It was never intended to be the only source of retirement income.
Social Security is a complex program, and the retiring population needs support navigating the tricky claiming decision process. If you’re like most retirees, your Social Security benefit represents years of savings and hard work. You may plan to use it to build your retirement income. Though you may have some basic familiarity and knowledge about filing for Social Security benefits, far fewer people can determine the optimal way to file so they can maximize their benefit and combine it with other retirement strategies.
Our Social Security Optimization Proprietary Software allows us to create multiple scenarios and compare them to understand the pros and con in dollar amounts of claiming sooner or later. Provides a comprehensive report which estimates monthly Social Security income based on claiming retirement ages and earning records. With our help, we examine other factors that may affect your decision, such as other income sources, taxation or health concerns.
Annuities are insurance products and are subject to state insurance laws and regulations. Annuities are designed to be long-term investments and may not be suitable for all investors. Annuity guarantees are based on the claims paying ability of the insurance company. Annuities can involve charges such as administrative fees, annual contract fees, rider fees, mortality & risk expense charges and surrender charges. Early withdrawals may be subject to surrender charges and can impact annuity cash values and death benefits. Withdrawing more than the guaranteed annual withdrawal amount on an annuity with an income rider can reduce the future guaranteed annual withdrawal amounts. Taxes are payable upon withdrawal of funds. An additional 10 percent IRS penalty may apply to withdrawals prior to age 59½.
Annuities are not guaranteed by FDIC or any other governmental agency and are not deposits or other obligations of, or guaranteed or endorsed by any bank or savings association. When considering replacing or transferring out of an annuity it’s important to understand what costs may be incurred such
as surrender charges, tax consequences and the loss of death and/or income benefits.
Fixed indexed annuities are affected by changes in a stock or equity index over the crediting period. Even though changes in the index affect the interest credited to the fixed indexed annuity policy, a fixed indexed annuity is not an investment in the stock market and does not participate in equities,
commodities, fixed income or currencies.
Fixed indexed annuities may be subject caps, spreads, administrative fees and/or participation rates that will limit and/or lower the amount of interest that is credited to the fixed indexed annuity.
Caps – A cap is a preset limit that we use to calculate the interest rate for an index allocation with some crediting methods. With some annual point-to-point crediting options, an annual cap would apply. If the annual change exceeds the annual cap, the interest rate is equal to the annual cap percentage. With monthly sum crediting, a monthly cap would apply. If the monthly change exceeds the monthly cap, the monthly cap percentage is used for that month to calculate the interest rate. Positive monthly changes are subject to a monthly cap, or maximum; however, negative changes are generally not limited by the cap.
Annual Spread – An annual spread is a preset deduction used with some crediting methods to calculate the interest rate. The spread is subtracted from the change to determine the interest rate. Annual caps, monthly caps, and annual spreads are established when you purchase your Contract. These caps and spreads may be subject to change at a later date.
Participation Rate – The participation rate determines how much of the percentage of index growth for an index used to calculate any indexed interest credited to your contract.
All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Nor is it intended to be a projection of current or future performance or indication or future results.
Opinions expressed herein are solely those of Quality Financial Planning, LLC and our editorial staff. The information contained in this material has been derived from sources believed to be reliable but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed. All information and ideas should be discussed in detail with your individual adviser prior to implementation. Advisory services are offered by Quality Financial Planning, LLC an Investment Advisor in the States of Texas and Florida. Being registered as an investment adviser does not imply a certain level of skill or training.
Insurance products and services are offered through Reyes Benefits, Inc., an affiliated company. Quality Financial Planning, LLC and Reyes Benefits, Inc. are not affiliated with or endorsed by the Social Security Administration or any government agency.
The information contained herein should in no way be construed or interpreted as a solicitation to sell or offer to sell advisory services to any residents of any State other than the State of Texas or Florida where otherwise legally permitted.
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Purchases are subject to suitability. This requires a review of an investor’s objective, risk tolerance, and time horizons. Investing always involves risk and possible loss of capital.
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