Even During the COVID-19 Crisis.
Knowing how to reduce risk and keep your money growing is a primary ingredient for a successful retirement. But unfortunately, doing both at the same time – and using the same financial vehicle – seems impossible.
For example, stocks and other growth-oriented investments can provide you with the opportunity to generate a high return. But they also come with a great deal of risk, in turn, exposing you to potential losses.
On the other hand, fixed-rate investments like CDs can keep your principal safe from market volatility. But even though the dollar amount of your principal won’t decrease, your ability to keep up with future inflation – and purchase the goods and services that you need in retirement – will.
So, if you’ll still be concerned about running out of assets in retirement, what’s the point of keeping your money safe beforehand?
What Investors are Doing Now to Reduce Financial Risk
According to the Alliance for Lifetime Income’s Retirement Reset Tracker survey, nearly 25% of people between the ages of 56 and 75 expect to have a lower tolerance for risk following the early 2020 stock market drop (compared to just 3% who plan to be more aggressive with their money).
Given the intense ups and downs experienced due to uncertainty during the Coronavirus pandemic, a multitude of investors have been shifting to financial vehicles that can assure them of a lifetime income in retirement.
The Retirement Reset Tracker survey also noted that having an employer-sponsored pension and/or an annuity gave investors more confidence that they would be able to cover their living expenses in retirement, regardless of what happens in the market.
Source: Economic and Market Uncertainty Changing Long-Term Retirement Investing Behavior. The Alliance for Lifetime Income
What You Can Do to Ensure a Reliable Retirement Income
Although building up your savings and net worth are an important part of your overall financial planning, the reality is that a successful retirement has to do with generating an income you can count on for the long term – regardless of how the stock market is performing.
One way to lock in a lifetime income stream is with an annuity. These financial vehicles are designed for paying out a set amount of regular cash flow for either a pre-defined number of years or even for the remainder of your lifetime, no matter how long that is.
Depending on the annuity, you could also garner additional benefits, too, such as:
- Market-linked returns
- Tax-deferred growth
- Protection of principal
- Penalty-free access to funds in various emergencies
But not all annuities are the same. So, before making a commitment to purchasing an annuity, it is recommended that you discuss all of your short and long-term objectives with a retirement income specialist.
At Annuity Gator, we eat, sleep, and breathe annuities. We’ve been educating consumers and financial advisors for many years on how annuities work, where annuities may (or may not) fit in with overall financial planning, and what to look for in an annuity in order to ensure that it is the right one for your specific needs.
In addition, we have an extensive Annuity Review Database on our website that goes over the in-depth details on hundreds of annuities and their offering insurance companies.
Need More Information on Keeping Your Portfolio Safe?
If you would like to set up a time to chat with an annuity specialist who can answer all of your questions regarding retirement income planning, feel free to reach out to us directly at (888) 440-2468, or via our secure online contact form. We look forward to hearing from you.