Vanguard: 6 Risks That can Drain Retirement Savings and How to Beat These Risks
3 Key Takeaways:
Be proactive in planning for risks that could otherwise drain your nest egg.
Have an extra emergency fund to prepare for unexpected costs.
Building a financial plan and sticking to it improves the odds your money lasts
As Vanguard's report eludes to, retirees face several challenges that weren't a factor as they saved and planned for retirement. Market risk, longevity risk, and behavioral risk are 3 challenges they state can derail retirement. You can read the full article HERE and get a glimpse below into how annuities can mitigate these 3 risks:
Market Risk: Today's annuities are the most efficient vehicle for providing guaranteed lifetime income. Using less money to generate more income mitigates sequence of return risk and allows advisors to increase equity exposure without additional portfolio risk.
Behavioral Risk: Buying high and/or selling low, being scared to spend money, and investing too conservatively are three behavioral risks that annuities can help mitigate. Check out RII's research HERE to read why people with similar wealth spend 2x more in retirement if they own lifetime income annuities!
Longevity Risk: Annuities guarantee their stream of income for as long as an individual or a couple live. This guarantee, more equity exposure, and less income needed from the rest of a client's portfolio help hedge against longevity risk.
Spotlight Client Solution*
8.28% Immediate Cash Flow at Age 65
Talcott's EverGuard Assurance is topping the charts for retirees who need income now!
$8,280/year of income is guaranteed to a 65 year old who deposits $100k
7.57% IRR at age 90
Excellent service on new business and existing policies
This cash flow generates more income with less money than traditional fixed income. Pairing that with increasing a portfolio's equity exposure leads to better outcomes.
Notable Client Solutions*
10.25% S&P Guaranteed Cap
Revol One has removed the two biggest problems with accumulation FIAs:
Rate Renewals: The annual cap is contractually guaranteed to stay at 10.25% for all 7 years.
Indexes that Don't Perform: The index is the actual S&P 500. Not some hyped up index.
6.15% Fixed Rate for 5 Years
Fixed rates are BACK above 6.00%!
Revol One's DirectGrowth MYGA offers rates up to 6.15% guaranteed for 5 years.
Want to see how MYGAs stack up against CD's? Click HERE
*Rates may be subject to premium banding. Products may not be available in all states. Replacement must be suitable and meet all requirements.
At Foundational Income, we strive to bring relevant topics and solutions to your fingertips in a straightforward way. We don’t see the need to keep products nor carriers a mystery. If you’d like to discuss any of this in more detail, give us a call!