Who doesn’t love a good deal, right? Most people will drive across town to save $100 on a TV or negotiate for hours to get that new car for $500 less. What makes those ‘deals’ so attractive is the fact that you know exactly the amount of cost you’re avoiding. It’s very tangible.
Well, what I’m about to tell you is a bit more complicated than saving $100 off another store’s price in the Sunday paper, but the impact of this pricing change will have enormous effect on the retiree who waits to act. Yes, this is as “Call now while supplies last!” as I get. Please don’t tune me out though, this is big.
For the sake of brevity, I need you to decide right now that I know what I’m doing when it comes to retirement income planning. I need you to make the decision that what I’m about to tell you works empirically and factually. It also works in the wild, in the lives of many, many retirees. Are you comfortable making that decision with me? Good.
To build a successful retirement, the vast majority of retirees should secure for themselves several sources of reliable and guaranteed income, not leaving their retirement to chance in the wild-swings of the stock market. In addition to Social Security and a company or government pension, most retires should also convert a portion of their nest egg to guaranteed lifetime income using a very specific selection of annuities. While Wall Street does not guarantee anything to you in the stock and bond markets, insurance companies offer you contractual guarantees in the form of lifetime income annuities.
Okay, so what’s the big deal? Well, the payout rates that insurance companies offer on guaranteed income annuities are being reduced sometime in 2016. That means the same amount of money deposited into an annuity next year will provide a lower amount of income payments than it will if the deposit is made this year.
While annuities may still be the most formidable product for retirees to build a safe and secure retirement income, there is no better time to investigate them than now.
How does this work? In short, the mortality (when we’re going to die) tables that insurance companies currently use to price income payouts from annuities assume that one member of a 65 year-old couple will live to age 95 28% of the time. When they begin using the newly-updated mortality tables, the odds of one spouse living to age 95 jumps to 52%! That’s almost double the current expectation. As a result, the insurance companies need to reduce payouts to reflect this new longevity.
In other words, if you are going to live longer, the insurance company needs to make your money last longer. They can either invest it at higher risk, or they can guarantee a lower income to you.
It’s estimated that lifetime income payouts may be reduced by about 10% once the new tables take effect.
So lets’ recap:
- You and I think I know what I’m talking about when it comes to retirement income planning.
- Retirement income planning is best accomplished with multiple sources of guaranteed income, and guaranteed lifetime income annuities are specifically designed to offer retirement income for retirees; it’s what they do best.
- People are living longer, so insurance companies need to alter their income products to reflect that fact, reducing payout rates in 2016 and beyond.
Therefore, the best time for an aspiring or current retiree to build guaranteed income into their income plan IS RIGHT NOW. Not next year, not in a few years, RIGHT NOW.
If you know someone who is nearing retirement or recently retired, please alert them to begin their retirement planning now. If their plan is best built using annuities, they will benefit greatly from the heads-up you’re about to give them. If their plan does not warrant annuities, they will benefit greatly from learning that fact now and making decisions accordingly.
This is as high-pressured as you’ll find me. Please get the word out and encourage your 55-and-over friends and family members to engage with us in retirement income planning soon…while supplies last.[vc_row no_margin=”true” padding_top=”0px” padding_bottom=”0px” border=”none”][vc_column width=”1/1″]All the best,
Adam Cufr, RICP®
PS. Please see below for information on the upcoming classes I’m teaching at BGSU Levis Commons. In fact, here’s a link to the class’ electronic brochure: Click Here
As you may be aware, we teach classes at BGSU at Levis Commons called Retirement Elevated.
These classes are designed to offer the current or aspiring retiree a serious education in retirement planning. This is a wonderful opportunity for you or your friends to access a lot of great material in a focused classroom educational setting.
During the two-evening class, we will go in-depth in the following planning topics:
- Retirement Income
- Investments
- Taxes
- Healthcare
- Estate Planning
Retirement Elevated classes are designed for people between the ages of 50 and 75 who seek to strengthen their understanding of retirement planning and all of its nuances.
CLASS DATES AND TIMES ARE AS FOLLOWS:
Tuesdays, September 22nd and 29th
6:00 to 9:00 p.m.
-or-
Thursdays, September 24th and October 1st
6:00 to 9:00 p.m.
If you or a friend would like to register, contact our office at (419) 931-0704
Class Fee: FREE!
Materials Fee: $49 (additional workbook $19)
If you’d like to see the complete course flyer, contact us and we’ll get you a copy.
