In this guide, I’ll go over the only guaranteed method to empower retirement and finance your future income. This method may not be the fastest way to invest, but currently is the only guaranteed path in retirement income planning. This method is ideal for investors wanting to create their retirement plan and follow a set path leading up to retiring. A consumer age 30 through age 55 would be perfect for this strategy.
Sometimes doing things the hard way is the right way.
Starting today, any participants can create this exact path to their desired future lifestyle in retirement and take all the second-guessing out of saving for retirement.
In this guide, you will learn how to:
- Save money towards retirement in an efficient way.
- See a clear path to the desired retirement income in the future, guaranteed.
- Minimize taxes when retiring.
In addition, this guide will answer the following questions:
- How much money do I need to retire?
- When can I retire?
- How much to save for retirement?
This retirement plan is ideal for:
- Sandwich Generation
- Generation X
- Generation Y
- Xennials
- Millennials
- Investors wanting to buy an annuity at age 40 to age 55.
If you are nearing retirement or currently retired, learn how to save and spend wisely without running out of money.
- Empower Retirement DIY
- Empower retirement By Guaranteeing a Future Retirement
- How Annuities Empower retirement
- Calculating How Much Money You Need To Retire?
- How to Empower Retirement Early or Wealthy
- How long will my money last?
- Preparing For Retirement By Age
- Empower Retirement Planning Tips
- Conclusion
- Find Out How You Can Empower Retirement Today
Empower Retirement DIY
Investing funds into an IRA or 401k from a paycheck is the primary method most Americans utilize when saving for retirement. The problem with this method is calculating how much to save for retirement, deciding on the investing options along the way, and hoping not to lose money.
Another problem with this method is that once an employee nears full retirement age, that individual must decide how to live on their 401k or IRA and figure out how to stretch their nest egg out for the rest of their lives.
What if the individual hasn’t saved enough? Must they downsize their lifestyle because they didn’t invest correctly?
By empowering retirement planning yourself, you control your destiny. You dictate where your future lies.
Empower retirement By Guaranteeing a Future Retirement
To retire, a person needs money to finance their retirement. Unfortunately, there are currently only two retirement savings plans that guarantee an income for life: Social Security and Annuities. These two vehicles allow you to empower retirement.
Social Security
Currently, Social Security provides a guaranteed retirement paycheck to every American that works. However, a considerable disadvantage is that a person who hasn’t retired yet can’t control the amount of future income generated from Social Security Benefits, leaving some guesswork.
Another argument would be if the program would still be around in the future or change entirely from today’s standards, which could be a massive wrench in any plan.
Annuities
Currently, annuities are the only retirement savings plan that guarantees a paycheck for an entire lifetime or lifetimes, even if there is zero money left in the annuity. There are two methods; an annuity can generate a guaranteed income during retirement, annuitization, and lifetime withdrawals.
- Annuitization: Converting retirement savings into an irrevocable stream of income for either a fixed period of time or a lifetime(s).
- Lifetime Withdrawals: The distribution of withdrawals for life from a Guaranteed Lifetime Withdrawal Benefit (GLWB) offered by a deferred annuity. A GLWB is also known as an “income rider.”
- Annuitization Vs. Lifetime Withdrawals
Annuity owners can control the amount of desired income they receive in the future through annuity plans. Utilizing an annuity allows a person to guarantee their desired future retirement paycheck, starting today, leaving zero guesswork in determining how long money will last in retirement tomorrow.
Controlling your future is empowerment.
How Annuities Empower retirement
Annuity Basics
Understanding Lifetime Income Riders
Calculating How Much Money You Need To Retire?
There are three steps that an individual can take to empower retirement planning.
Step #1: Calculate Social Security Benefits
The first step is to calculate future Social security Benefits. The calculations generated aren’t guaranteed but will provide a rough estimate of what you can collect in the future.
Step #2: Find the Perfect Annuity
The participant’s current age, desired future income amount, and target retirement age will determine which annuity is the best for the participant’s situation and create a roadmap to follow. Utilize the annuity to offset some potential reductions in the Social Security Income just in case. Request a quote to start the process.
Open 2 deferred annuity contracts:
- Roth IRA Annuity: Lifetime income payments to you will tax-free. Maximize contributions each year to this contract first.
- Non-Qualified Annuity: Only the interest will be earned will be taxed for life.
Step #3: Follow The Roadmap
Once the retirement roadmap is created, follow the steps exactly as it is laid out. It’s ok to increase the contributions. It is not ok to decrease the contributions.
If calculating the retirement income amount is overwhelming, start by determining the current essential monthly expenses needed to survive.
To calculate the amount of income needed to be generated from the annuity, use the current essential monthly expense amount, then subtract the estimated monthly Social Security Benefits. The remainder will be the starting point to calculate the desired income generated from the annuity.
To calculate a more accurate income, one could also include an inflation rate of 3% a year between now and the desired target retirement rate.
Key Takeaway
Current Expenses – Social Security + Inflation = Annuity Income To Solve For
How to Empower Retirement Early or Wealthy
Retire Early
Time is the critical factor in deciding how much one needs to save to retire early. Therefore, if a person seeks to retire early, higher contributions than average will need to be set aside each month depending on the current individual’s age and the target retirement age.
Retire Wealthy
The term “wealthy” is subjective and will vary from person to person. Utilizing this method will determine wealth based on desired income amounts vs. a lump sum of cash.
The contributions are the key factor in deciding how much one needs to save each year from retiring wealthy. If a person seeks to retire rich, the critical factor is the amount of money contributed and the frequency of contributions until the pre-determined wealth amount is met.
The length of time can be shortened or stretched to retire wealthy, which leaves more flexibility than solving for retiring early.
Planning
The methods of creating a roadmap for retiring early or wealthy are:
- equal contributions over a period of time or;
- starting with an initial amount of money and slightly increasing the contribution amount regularly over time.
Annuities can accommodate for either contribution method.
How long will my money last?
The money generated from annuities, both annuitization and income riders, will last for a lifetime even if the annuity has run out of funds.
Preparing For Retirement By Age
Your 20s
Your 30s
Your 40s
Your 50s
Your 60s
Empower Retirement Planning Tips
Retirement Age: Don’t make the mistake of taking SSI early. Defer benefits until the full Social Security retirement age or age 70. Taking a reduction in benefits will affect an individual later in life when Long Term Care is needed. Long Term Care costs are costly, and a 70% chance a person will need the care.
Roth IRA Annuity: Setup a Roth IRA Annuity first. Income generated from a Roth IRA Annuity will be tax-free as long you follow the IRS guidelines. An individual can contribute up to $7,000 annually, depending on the person’s age. Fund this annuity contract first and fund other annuities after the maximum contributions are met.
Non-Qualified Annuity: After the Roth IRA Annuity has been fully funded each year, set up and fund the non-qualified annuity. There are typically little to no contribution limits with a flexible-premium annuity. In addition, non-qualified annuities are funded by money that has already been taxed, and only the interest earned will be taxed once you generate income during retirement.
The consensus is that taxes will only increase in the future. Higher taxes result in less income for the retiree. A non-qualified annuity reduces this risk compared to a traditional IRA or IRA annuity because only the interest is taxed instead of the entire amount.
Life Insurance: Buy a life insurance policy. Protect loved ones financially starting today in case the retirement plan fails because of early death. Find the highest death benefit possible at the cheapest cost.
Conclusion
To empower retirement, one must control their financial future. Currently, annuities and Social Security on the only method that can guarantee an American a paycheck for life in retirement.
Today, a participant can control when they retire and how much desired income they will receive tomorrow during retirement by investing in a deferred annuity.
Utilizing annuities combined with Social Security Income isn’t exactly the fastest way to save. Still, it is the only guaranteed method that allows people to empower retirement planning for themselves rather than relying on others.
Take the first step to create your retirement roadmap.
Find Out How You Can Empower Retirement Today
Why you can trust The Annuity Expert
At The Annuity Expert, we strive to help you make confident financial decisions regarding annuities. Content provided is created by an independent licensed financial professional.
The Annuity Expert is an online insurance agency that provides the widest variety of annuities in the United States. When you buy an annuity directly from us, we receive a predetermined commission from the insurance company (not you). While your annuity is active, clients are not charged any servicing or management fees. Learn more.
I’m a licensed financial professional. I’ve sold annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.
My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you.