Snarr Financial & Insurance Services, Inc.
1640 Highland Falls Dr.
Leander, Texas 78641
CFF, LACP, NSSA
A recent article in Money Magazine (https://money.com/save-for-retirement/) shined a bad light on Americans planning retirement. Health care expenses, living longer, and the lack of company pensions create a future disaster for many Americans. The exposure to out-of-pocket expenses is growing, and future estimates put the lifetime number of financial exposure in the multi-hundred thousands. How many? 40%! Health care mystifies many retirees who have perceived Medicare as free; the only free part is Part A.
A report from the life insurance research board (LIMRA) http://www.limra.org reports that a high percentage of retirement advisors are saying there’s an enormous fear from their clients of running out of money.
The devastating effects of living too long (the longevity crisis) and not having enough funds to maintain an anticipated quality of retirement is a real concern. LIMRA reports: The average life expectancy for a person who reaches 65 is 83 for males 86 for females. LIMRA purports that the proper way to interpret these statistics is to assume half of all males who reach age 65 will live past 83, and half of the females who reach that age will live past 86. Half of all couples who reach age 65 will have one partner hit 90.
How will the average person entering retirement make their money last as long as they do?
Important retirement money must last a long time. In the report, LIMRA stresses that education is key: It is up to those entering their retirement stage to understand their options and choices fully. Obtaining the necessary information to make the correct decision can be arduous and overwhelming, but so can the opposite.
One key recommendation from LIMRA suggests advisors begin to seriously discuss products with guaranteed income solutions, such as annuities, with their clients.
Annuities can provide income for any period, even a lifetime, i.e., funds can last as long as you do. If you select an annuity as your primary retirement building platform, the other concern that will raise its head is inflation. Many people choose to place a portion of their funds in an annuity (a primary source of income) and other funds into an asset, which may help with inflationary issues.
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