If you are one of the fortunate few who have a defined benefit retirement plan, you have more predictability in your retirement income than most. You can calculate your combined pension benefits and any Social Security benefits that you have earned and have a clear idea of your annual income throughout retirement – assuming you
Years of low interest rates have provided underwhelming options for investors seeking Certificates of Deposit (CDs) as a relatively safe component of their portfolio. Yields above 1% are hard to find and often require tying up your money for a lengthy period. Even with a laddering strategy, the poor yields may not be worth the
Retirees fear running out of money, and rightly so. This can happen to you in three ways – you fail to accumulate enough retirement assets, unexpected expenses drain your retirement funds, or you outlive your expected lifespan (and therefore, your money). You can reduce the possibility of the last one by purchasing a deferred-income annuity.
In general, early withdrawal of funds from your retirement account is a bad idea. Not only are the withdrawals taxed at your current income rate, but you will also pay a penalty of 10% on the withdrawn amount. However, there are some financial circumstances where early withdrawal is needed – and if you are in
The pitch is very appealing to fiscally conservative seniors. Earn up to 8% on your investment with a guarantee not to lose money. Sounds too good to pass up, doesn’t it? Welcome to the world of indexed annuities. These financial vehicles are sold by insurance companies and target the risk-averse investor or retiree. Indexed annuities
You may have saved diligently for retirement and managed your money well, but in the end, long-term care costs can derail your plans and quickly exhaust your savings and other assets. According to LongTermCare.gov, average costs for 2010 were $6,235 and $6,965 per month for semi-private and private rooms in nursing homes, respectively. For how
The sad fact is that many retirees today are living on very small fixed incomes – money from IRAs they may have started late in their careers, and the small monthly amounts they receive from Social Security. To help supplement their finances, some retired investors are being drawn to purchase secondary market annuities, which promise
An annuity is an insurance product and retirement planning tool that establishes a future income stream based on a current investment. Most annuities are sold through insurance companies, but some are supplied via direct sale from investment companies such as Vanguard and T. Rowe Price. You have two choices regarding the style of annuity: Deferred