With people living longer these days, one of the biggest fears on the minds of retirees (and those who are planning for retirement) is outliving their money. In order to ease some of these worries, the U.S. Congress passed the SECURE Act 2.0, which could have an impact on how, and how well, you retire.
Why the SECURE Act 2.0 Could Change the Way You Retire
The SECURE Act 2.0 follows the original SECURE Act that took effect in 2020. This new retirement legislation builds on the initiatives that were started a few years ago to assist Americans with a more financially secure future.
Some of the highlights of the SECURE Act 2.0 include:
- An increase in the age at which required minimum distributions (RMDs) from traditional retirement accounts must start – from 72 to 73 in 2023, and to 75 by the year 2033;
- Conversion of the “saver’s credit” from a traditional tax credit to a direct government contribution of up to $2,000 to an IRA (Individual Retirement Account);
- Requirement of certain businesses to automatically enroll their employees into 401(k) plans;
- The ability of employers to treat their employees’ student loan payments as if they were 401(k) contributions for the purpose of an employer-matching contribution.
But even with these new provisions for retirement savings, it is still possible to run out of money when you still need it in the future.
Creating a Truly Financially Secure Retirement
While saving and investing is a good start for building your retirement nest egg, it is still possible that you could run out of money when you need it in the future. That is, unless you have a good solid income plan in place.
Just simply making withdrawals from your portfolio can lead to the depletion of assets over time – and this time period could be short if the stock market falls and/or interest rates go back to their historically low levels.
That is why putting an “income floor” is essential – and you can do this with an annuity. These financial vehicles can generate a set amount of cash flow for a specific time period, such as 10 or 20 years, or even for the remainder of your lifetime… regardless of how long that may be.
Imagine knowing that you have “replaced” some (or all) of your pre-retirement paycheck, and these funds will continue to flow in no matter what happens in the market, or even in the economy as a whole.
There are many different types of annuities, though, so it is important to work with a retirement income specialist before you make a long-term commitment to one. That way, you will have a better understanding of what you can and can’t anticipate going forward.
Are You on Track to Retire with a Lifetime Income Stream?
Do you have a stable and secure retirement income plan in place?
Even with the many benefits offered through the SECURE Act 2.0, one or more ongoing income streams should be at the top of your retirement planning to-do list. This is where Annuity Gator can help.
At Annuity Gator, our focus is on helping people create a comfortable retirement by putting reliable incoming cash flow in place. This can bring you much more certainty in the future, and in turn, allow you to concentrate on other important matters, like relaxing and spending time with loved ones.
So, if you would like to set up a time to chat with an Annuity Gator retirement income expert, please feel free to contact us directly by phone at (888) 440-2468, or you can send us an email through our secure online contact form. We look forward to hearing from you.