How much income in retirement will you be able to count on? If the dollar figure of incoming cash flow is less than your anticipated expenses, it could require you to make some significant changes in your lifestyle.
According to the EBRI (Employee Benefit Research Institute) 2020 Retirement Confidence Survey, many workers continue to say that they are behind in their retirement preparations – and this includes saving for retirement.
In the past, many retirees relied on three distinct sources of retirement income. These included:
- Employer-sponsored pension
- Social Security
- Interest/Dividends from personal savings or investments
Given that many people did not live for very many years after they retired, these income sources would oftentimes provide more than enough to cover all of their necessary expenses, as well as some of the other “wants” (versus needs).
But today, it is a different story.
Why Retirement Income Isn’t Very Certain for Today’s Retirees
Today’s (and tomorrow’s) retirees don’t have quite the income security that their ancestors had. One reason for this is because many companies have eliminated the traditional pension plan, due in large part to the vast expense of paying out the income benefits.
These plans have essentially been “replaced” with defined contribution plans, the most popular of which is the 401(k). Yet, while there are some nice tax-related perks that come with participating in a 401(k) or similar savings plan, having enough future income is now the responsibility of the employee, not the employer. And, if there isn’t an ample amount of income available, it may be necessary to either delay retirement or to reduce your intended future lifestyle.
Another reason for fear of not being fully prepared for retirement income needs is the fact that the Social Security program is having financial difficulties. Even from the beginning, this source was never intended to fully replace a retiree’s full amount of wages. Today, according to the Social Security Administration, an average wage earner can replace a little less than 40% of his or her pre-retirement earnings. (For higher wage earners, this percentage can be much smaller, though).
How Confident Are You About Generating Enough Income in Retirement?
So, given the current state of previous retirement income generators from the past, are you confident that you’ll be able to attain and maintain your desired lifestyle in retirement? If not, we can help.
At Annuity Gator, we place a key focus on educating consumers – as well as financial professionals – on how annuities can be integrated into overall financial plans and in turn, can provide a known amount of income for a stated period of time, or even for the remainder of a retiree’s lifetime (no matter how long that is).
So, if you would like to chat with a retirement income specialist and determine whether or not an income-producing annuity may be right for you, feel free to reach out to us directly by phone at (888) 440-2468 or via email by sending us your questions to our secure online contact form. We look forward to assisting you with creating a customized retirement income plan that meets your specific objectives.