Financially plan for your retirement income

When you picture retirement, you may think of traveling, pursuing your favorite hobbies, or spending time with your family and friends. To ensure you have enough saved up to enjoy all of these activities, be sure to create a retirement plan that outlines the income you need to cover both planned and unexpected expenses.

 Why should I plan my income in retirement?

When you transition from work to retirement, you may plan to rely upon your savings and income from Social Security, 401(k)s, and pensions. However, with people living longer, increasing inflation, and the uncertain financial health of Social Security in the future, creating a secure retirement is becoming increasingly challenging.

 What to consider when planning for your retirement income

Determine your retirement spending needs

To estimate the retirement income you will need, consider how much money you’ll be spending once you leave the workforce. Having realistic expectations about your retirement costs, spending habits, and income can help you prep for the next chapter more effectively and be better prepared for unexpected expenses like medical bills or long-term care. Questions to think about include:

• What is your expected income during retirement? This may include Social Security, pensions, annuities, money from a part-time job, or income from a rental property you own.
• What are your estimated costs for your planned retirement activities, such as travel? How might you estimate unexpected expenses such as medical costs?
• What is the status of your investment portfolio and retirement accounts? Will assets have some growth potential due to inflation? Do you need to re-evaluate your investment risk tolerance?
• How long will your money last? To avoid outliving your savings in retirement, you’ll want to ensure there are no income gaps between your expected and actual expenses.

Consider a fixed index annuity

Even if you have built a diversified retirement plan that includes a variety of investments and savings vehicles, that money can be affected by market fluctuations. One type of financial product that can help you secure retirement income and lessen the effect of market volatility is a fixed index annuity (FIA). Along with providing income payments in retirement, adding a FIA to your retirement income plan can help you grow your savings while protecting those assets from market volatility. You can receive index credits based partly on index performance without directly investing in the market. Your money is protected when the market goes down, and you can never earn less than zero. This combination of upside potential and downside protection can help you grow your assets for retirement while protecting your hard-earned savings from market fluctuations.

Many FIAs also provide a “retirement paycheck” that you can count on for the rest of your life. With this guaranteed income stream, you can rest assured that you’ll have the money you need to keep up with expenses and maintain your standard of living throughout retirement.

 Discuss retirement goals with a financial professional

Partnering with a trusted financial professional can be an essential step in the retirement planning process to help you create a roadmap for accomplishing your goals and ensuring you have enough savings for the future. Whether you’re looking to grow your retirement savings without downside market risk or turn your nest egg into an income stream, a financial professional can help you create a personal strategy that will allow you to build the savings you need to turn your visions of retirement into reality.

The term financial professional is not intended to imply engagement in an advisory business in which compensation is not related to sales. Financial professionals that are insurance licensed will be paid a commission on the sale of an insurance product.

B3-MN-8-23