How Long Can You Live on Your Retirement Income?

Over the past two generations, the “American retirement dream” has changed significantly. Your parents and grandparents probably retired with a little money in the bank, or drawing a pension from a former employer, and then they enjoyed about a decade of retirement. But with most of us looking forward to much longer life spans, some of us will be living on our retirement income for twenty or thirty years – perhaps even longer!

Naturally we’re very happy about the prospect of a longer, healthier life, thanks to improved nutrition and healthcare. But of course, this all means that we must shift our views on retirement in general. You might have already analyzed your retirement income needs, set a savings goal, and decided upon a target retirement date. Some retirees even work part-time to boost their income. But even with a carefully-planned strategy in place, it is normal to feel nervous about the possibility of outliving your money.

Inflation is a factor. Over the course of two to three decades, inflation will have a significant impact on your purchasing power. A budget that seems reasonable today is unlikely to cover living expenses thirty years from now.

Healthcare is expensive. Not only will the prices of everything from food to housing rise over the course of your retirement, but the price of healthcare is expected to outpace the rate of general inflation. And while a longer life is a great thing, it also means more medical bills as you age.

Those are just two of the big factors that will influence your retirement years. If you’re worried about outliving your savings, you might be relieved to know that we have ways of establishing a stable retirement income that lasts for the rest of your life.

This is why annuities are making a comeback. In exchange for a lump-sum payment on an insurance contract, you can enjoy dependable income for the rest of your life. Previous generations weren’t sure about their longevity, and often did not feel that annuities were a good deal for them. But with current life spans increasing, annuities have become a popular retirement planning option once again.

There are over 1,600 different types of annuity on the market, designed to meet a wide variety of needs. Payments can last for a specified period of time, or can be guaranteed for the rest of your life, depending upon the type and structure of annuity that you select. There is an annuity designed to fit almost any situation you can imagine, but you should seek expert guidance before signing on the dotted line. Call us to schedule a consultation, and we will explain the different types of annuity products so that you can select the one that best suits you.