 |
| Top 5 Reasons for Buying An Annuity |
1. Principal Protection
2. Guaranteed Rates
3. Protection of Gains
4. Eliminates Market Risk
5. Income For Life
2. Guaranteed Rates
3. Protection of Gains
4. Eliminates Market Risk
5. Income For Life
Saving for Retirement
Although most of us recognize the importance of sound retirement planning, few of us embrace
the nitty-gritty work involved. With thousands of investment possibilities, complex rules governing
retirement plans, and so on, most people don't even know where to begin. Here are some
suggestions to help you get started.
Determine your retirement income needs
Some experts suggest that you need anywhere from 60% to 90% of your current income to enable you to maintain your
current standard of living in retirement. But this is only a general guideline. To determine your specific needs, you may want to
estimate your annual retirement expenses.
Use your current expenses as a starting point, but note that your expenses may change dramatically by the time you retire. If
you're nearing retirement, the gap between your current expenses and your retirement expenses may be small. If retirement is
many years away, the gap may be significant, and projecting your future expenses may be more difficult.
Remember to take inflation into account. The average annual rate of inflation over the past 20 years has been approximately
3%. (Source: Consumer price index (CPI-U) data published by the U.S. Department of Labor, 2009.) And keep in mind that
your annual expenses may fluctuate throughout retirement. For instance, if you own a home and are paying a mortgage,
your expenses will drop if the mortgage is paid
off by the time you retire. Other expenses,
such as health-related expenses, may increase
in your later retirement years. A realistic
estimate of your expenses will tell you about
how much annual income you'll need to live
comfortably.
Calculate the gap
Once you have estimated your retirement
income needs, take stock of your estimated
future assets and income. These may come
from Social Security, a retirement plan at
work, a part-time job, and other sources. If
estimates show that your future assets and
income will fall short of what you need, the
rest will have to come from additional
personal retirement savings.
Figure out how much you'll need to save
By the time you retire, you'll need a nest egg that will provide you with enough income to fill the gap left by your other income
sources. But exactly how much is enough? The following questions may help you find the answer:
Build your retirement fund: Save, save, save
When you know roughly how much money you'll need, your next goal is to save that amount. First, you'll have to map out a
savings plan that works for you. Assume a conservative rate of return (e.g., 5 to 6%), and then determine approximately how
much you'll need to save every year between now and your retirement to reach your goal.
The next step is to put your savings plan into action. It's never too early to get started (ideally, begin saving in your 20s). To
the extent possible, you may want to arrange to have certain amounts taken directly from your paycheck and automatically
invested in accounts of your choice (e.g., 401(k) plans, payroll deduction savings). This arrangement reduces the risk of
impulsive or unwise spending that will threaten your savings plan. If possible, save more than you think you'll need to provide a
cushion.
Use the right savings tools
The following are among the most common retirement savings tools:
Employer-sponsored retirement plans like 401(k)s and 403(b)s are powerful savings tools. Your contributions come out of your
salary as pretax contributions (reducing your current taxable income) and any investment earnings grow tax deferred until
withdrawn. Some 401(k) and 403(b) plans also allow employees to make after-tax "Roth" contributions. In addition, employer-
sponsored plans often offer matching contributions, and may be your best option when it comes to saving for retirement.
IRAs also feature tax-deferred growth of earnings. If you are eligible, traditional IRAs may enable you to lower your current
taxable income through deductible contributions. Withdrawals, however, are taxable as ordinary income (except to the extent
you've made nondeductible contributions).
Although most of us recognize the importance of sound retirement planning, few of us embrace
the nitty-gritty work involved. With thousands of investment possibilities, complex rules governing
retirement plans, and so on, most people don't even know where to begin. Here are some
suggestions to help you get started.
Determine your retirement income needs
Some experts suggest that you need anywhere from 60% to 90% of your current income to enable you to maintain your
current standard of living in retirement. But this is only a general guideline. To determine your specific needs, you may want to
estimate your annual retirement expenses.
Use your current expenses as a starting point, but note that your expenses may change dramatically by the time you retire. If
you're nearing retirement, the gap between your current expenses and your retirement expenses may be small. If retirement is
many years away, the gap may be significant, and projecting your future expenses may be more difficult.
Remember to take inflation into account. The average annual rate of inflation over the past 20 years has been approximately
3%. (Source: Consumer price index (CPI-U) data published by the U.S. Department of Labor, 2009.) And keep in mind that
your annual expenses may fluctuate throughout retirement. For instance, if you own a home and are paying a mortgage,
your expenses will drop if the mortgage is paid
off by the time you retire. Other expenses,
such as health-related expenses, may increase
in your later retirement years. A realistic
estimate of your expenses will tell you about
how much annual income you'll need to live
comfortably.
Calculate the gap
Once you have estimated your retirement
income needs, take stock of your estimated
future assets and income. These may come
from Social Security, a retirement plan at
work, a part-time job, and other sources. If
estimates show that your future assets and
income will fall short of what you need, the
rest will have to come from additional
personal retirement savings.
Figure out how much you'll need to save
By the time you retire, you'll need a nest egg that will provide you with enough income to fill the gap left by your other income
sources. But exactly how much is enough? The following questions may help you find the answer:
- At what age do you plan to retire? The younger you retire, the longer your retirement will be, and the more money you'll
need to carry you through it. - What kind of lifestyle do you hope to maintain during your retirement years?
- What is your life expectancy? The longer you live, the more years of retirement you'll have to fund.
- What rate of growth can you expect from your savings now and during retirement? Be conservative when projecting
rates of return. - Do you expect to dip into your principal? If so, you may deplete your savings faster than if you just live off investment
earnings. Build in a cushion to guard against these risks.
Build your retirement fund: Save, save, save
When you know roughly how much money you'll need, your next goal is to save that amount. First, you'll have to map out a
savings plan that works for you. Assume a conservative rate of return (e.g., 5 to 6%), and then determine approximately how
much you'll need to save every year between now and your retirement to reach your goal.
The next step is to put your savings plan into action. It's never too early to get started (ideally, begin saving in your 20s). To
the extent possible, you may want to arrange to have certain amounts taken directly from your paycheck and automatically
invested in accounts of your choice (e.g., 401(k) plans, payroll deduction savings). This arrangement reduces the risk of
impulsive or unwise spending that will threaten your savings plan. If possible, save more than you think you'll need to provide a
cushion.
Use the right savings tools
The following are among the most common retirement savings tools:
Employer-sponsored retirement plans like 401(k)s and 403(b)s are powerful savings tools. Your contributions come out of your
salary as pretax contributions (reducing your current taxable income) and any investment earnings grow tax deferred until
withdrawn. Some 401(k) and 403(b) plans also allow employees to make after-tax "Roth" contributions. In addition, employer-
sponsored plans often offer matching contributions, and may be your best option when it comes to saving for retirement.
IRAs also feature tax-deferred growth of earnings. If you are eligible, traditional IRAs may enable you to lower your current
taxable income through deductible contributions. Withdrawals, however, are taxable as ordinary income (except to the extent
you've made nondeductible contributions).
Retirement Planning with Annuities
 |
| The Advisors Of "The Insurance Suite" Will Design A Plan To Meet Your Needs. |
| You Insure Your House. You Insure Your Car. Yet Many People Don't Realize They Should Insure Their Retirement Assets. Get A Complimentary Quote Today! |
| © 2009 - 2010 TheInsuranceSuite.com | Life Insurance | Health Insurance | Auto Insurance | Home Insurance | Business Insurance | Annuities | Customer Service | Privacy Notice | Careers | Branch Offices | Site Map | Frisco, Texas 75034 |
 |