Saving for retirement is an often talked about, and often feared, fact of life that generates a lot of questions. How much should I save away? When should I start saving? According to the U.S. Department of Labor, to maintain the same standard of living as you do now, you will need to replace between 70%-90% of your pre-retirement income. However, in today’s economy, many investors are asking a whole other sort of question: Is there a safe way to invest for retirement?  One option is a fixed annuity.

What is fixed annuity?
A fixed annuity allows you to set aside money to grow on a tax-deferred basis for your future use. When you are ready to retire or convert the value of your annuity into a regular income stream through a fixed annuity.

What is liquidity?
A fixed annuity is not like a checking account.  As with all retirement options, an annuity is a long-term retirement vehicle and usually means that you will not need the money for an extended period of time.  There are surrender charges if you take your money out before a certain period of time. However, many fixed annuities may allow you to take a 10 percent of your money without of your money without being charged for it. 

If you have more questions or would like to learn more about your retirement options, please contact me and we'll come up with a plan on how to handle your retirement finances.

Want more articles from Ken? Check out his other Guest Blog Posts!  

This is a guest post from FCU's Financial Advisor, Ken Toops. 

What is enough? If you’re considering retiring in the near future, you’ve probably heard or read that you need about 70% of your end salary to live comfortably in retirement. This estimate is frequently repeated … but that doesn’t mean it is true for everyone. It may not be true for you.

Consider the following factors:

Health - Most of us will face a major health problem at some point in our lives. Think, for a moment, about the costs of prescription medicines, and recurring treatment for chronic ailments. These costs can really take a bite out of retirement income, even with a great health care plan.

Heredity - If you come from a family where people frequently live into their 80s and 90s, you may live as long or longer. Imagine retiring at 55 and living to 95 or 100. You would need 40-45 years of steady retirement income.

Portfolio - Many people retire with investment portfolios they haven’t reviewed in years, with asset allocations that may no longer be appropriate. New retirees sometimes carry too much risk in their portfolios, with the result being that the retirement income from their investments fluctuates wildly with the vagaries of the market. Other retirees are super-conservative investors: their portfolios are so risk-averse that they can’t earn enough to keep up with even moderate inflation, and over time, they find they have less and less purchasing power.

Spending habits - Do you only spend 70% of your salary? Probably not. If you’re like many Americans, you probably spend 90% or 95% of it. Will your spending habits change drastically once you retire? Again, probably not.

Will you have enough - When it comes to retirement income, a casual assumption may prove to be woefully inaccurate. You won’t learn how much retirement income you’ll need by reading this article. Give me a call and I can help estimate your lifestyle needs and short-term and long-term expenses.

Want more articles from Ken? Check out his other Guest Blog Posts!