In another article, we provided a few tips for success in retirement. Let’s take a step back and explore the realities of retirement today and a possible solution to common financial concerns.
The word “retirement” can bring up a variety of emotions.
Some dream of spending every day on a golf course, at the beach, with grandchildren, gardening or traveling. After 40+ years of working hard and raising a family, some feel ready to embrace those hobbies and enjoy their time away from work. For others, retirement can bring up feelings of uncertainty and even fear.
As you consider the way retirement will look for you, a good place to start is by assessing your financial preparedness. You're used to keeping up your bank account with a regular paycheck from your employers — which can leave you with valid concerns and questions.
- Am I prepared to retire?
- What happens to my bank account in retirement?
- How do I keep up with my finances?
- How do I guarantee that I’ll have income throughout retirement?
Put a retirement income plan in place that works for you
You can ensure you’re prepared for your retirement by planning ahead.
To help grow your retirement savings, start building the habit of saving what you'll need and only spending what’s left.
Additionally, a financial professional can help you put a retirement income plan in place that works for your needs — one that can keep money coming in after you’ve stopped working.
Realities of retirement income today
Retirement today may not look the same as it did for earlier generations.
For example, pension plans — which would pay you a monthly check for the rest of your life — were a multi-decade trend for companies to offer employees. But they’re no longer common and have been declining over the last couple decades.
In 2024, only about 16% of Fortune 500 companies still offered a defined benefit pension plan to new hires, down from 59% in 1998.1
In addition, people are living longer and needing income longer than they used to.
According to the CDC, the average life expectancy in the United States in 2024 is 77.2 years, compared to 73.7 years in 1980. The growth in life expectancy tells us more and more people are living well into their 80s, 90s and even 100s.2
This increased life expectancy creates a need for more years of guaranteed retirement income. And sources like Social Security and pensions may not be enough to meet your income needs in retirement.
It's important to invest wisely and plan how you’ll generate income after retirement. One way of doing this is through income annuities.
Give yourself protected income for retirement
So often, the focus of planning for retirement is on growing our retirement savings. We should also focus on turning our accumulated assets into income in retirement.
For those looking to retire, one purpose of accumulation is to create monthly retirement income. By purchasing an income annuity, you will be generating checks for life. This is a guaranteed way to secure income during your retirement years.
If guaranteeing your income sounds good, the next step is to talk to your financial professional. Here are a few questions you’ll want to ask your financial professional:
- How much money will I need in retirement?
- What are my guaranteed sources of income (e.g., Social Security)?
- What is the income gap between how much I'll need and how much I currently have guaranteed?
- How can I fill that gap with other retirement assets to create lifetime income?
Talking through these questions with your financial professional will help you determine if an income annuity is a good solution for you.
