Feeling strung out, wrung out, and depressed over money worries? The news is all doom and gloom: Americans aren’t saving enough
, there is a retirement crisis, and government benefits are uncertain. Combine this with increased life expectancies, and it’s no wonder the Pew Research Center reports
that the majority of Americans (56 percent!) would prefer NOT to live to the age of 120 or more, even if they could.
Defined benefit pension plans have been disappearing steadily for the last 25 years, making the Boomers the first generation to retire without the safety net of a guaranteed lifetime income – but they won’t be the last. Welcome to the new normal. Is running out of money your worst nightmare? Are you afraid of spending the money you do have? Worry no more. Cure yourself with these three easy steps.
STEP #1: UNDERSTAND WHERE THE FEAR COMES FROM
Every day another 10,000 Americans turn 65
, which has typically been considered full retirement age. But it’s not full retirement age anymore, according to the Social Security Administration. If you want to receive your full or unreduced retirement benefits, then you have to wait a few years longer or face up to a 30-percent lifetime retirement pay cut
This is significant because according to The Insured Retirement Institute (IRI) 2016 Boomer Expectations for Retirement
report, 59 percent of retirees are relying heavily on Social Security for their income. When you don’t have a pension, what else besides Social Security do you use to get your income? Most people today have to rely on their savings. Whether the money sits in securities accounts, savings, or in an IRA, it’s watching the steady depletion that causes anxiety.
STEP #2: MAKE A MENTAL SEPARATION
by Chief Academic Officer Dr. Michael Finke at the American College of Financial Services about the psychology of spending reveals a new perspective that can help you to spend your savings without remorse. He finds that there is a distinction between wealth and income in our minds. “Once we start viewing money as wealth, as a stock of money and not necessarily as a flow, then we seem to get less happiness out of spending it than we do from money that’s automatically turned into a flow,” says Dr. Finke.
shows that it’s easier to spend our income
than to spend our savings. This makes sense if you think about how the burden of saving has shifted. It’s now the responsibility of the employee to save and invest for retirement. It’s only natural to become attached to this wealth, to feel more secure knowing we have a certain amount growing in our accounts. What happens when we start to see that number steadily going down? We are negatively affected. What happens when we spend our income? The study found no negative effect on the mental or emotional state of retirees when they spend money designated as income.
STEP #3: GET YOURSELF A GUARANTEE
Retirees who have a guaranteed income
are less stressed and more satisfied, but what’s interesting is that the level of satisfaction does not go up with the amount of wealth. Our satisfaction goes up in proportion to the guarantees. If you don’t have a pension, then you’re likely experiencing a lack of guarantees in your life, which could be adding to your stress.
There is only one way to turn your 401(k) or IRA or investment savings into a flow of guaranteed income and that is why annuities exist. They are the only financial tool that can turn a sum of money into a regular paycheck. The problem is that the guarantees they provide are not all the same. Different annuities provide guarantees for different periods of time. For example, some give you income for 10 years, others give you income for life, and still, others give both you and your spouse income whereas other kinds of annuities are designed only for one pension, much like traditional pensions. This is where step three gets complicated, but you don’t have to figure it out alone. Tell us
how much income you need and for how long, and we can help you shop around
It doesn’t cost anything to get started
and we always look for the annuity with the lowest fees because our loyalty isn’t to a particular insurance company, but rather our goal is to help you
. Give us a call or fill out this form
and one of our annuity experts will help find the right solution for you so you can retire with income, assets, and peace of mind.