Retirement rules are changing:

Employer pensions are disappearing, Social Security and Medicare are on wobbly legs, growth of investments is uncertain, interest rates are near zero, medical costs are zooming skyward and retirees are living longer. The premature death of retirement money is a worrisome concern. Contrary to what some would have you believe, retirement planning is more than reaching “your number” or following a “green line”. How much will be needed depends on lifestyle, health, emergencies, reliable income, spending habits, expenses and more. Retirement planning should not be ignored.

Nonetheless, retirement planning is rarely done and many retirees continue to invest the same as when they were working. Retirees commonly keep their life savings in “the market” – the same market that has melted down twice since 2000 and is currently volatile and unpredictable. Money kept in the market can die unexpectedly; therefore, prudence says consider the suitability of a safer course unless you harbor a “death wish” for your money. What can be done

to protect your money and your retirement?

Start by measuring how much dependable annual income you’ll have in retirement: Social Security, pension, rental income, dividends, investment income, etc. and conservatively assess the likelihood of their continuation. Next, measure what you expect to spend annually in retirement, making sure to adjust for inflation. Expected income minus expected expenditures will provide the annual shortfall (or surplus if you’re lucky). Assume your expected annual income will be $50,000 and your anticipated annual expenditures are $65,000, leaving you with a $15,000 annual shortage. Let’s say your current age is 65 and you expect to live to age 95. The shortfall over 30 years will amount to $450,000 ($15,000 x 30 years). Compare this amount to your current investments & savings and ask yourself: is a market gamble, and possible “money death”, worth the risk?

The foregoing glosses over many important things that should be included in your retirement plans. If you do not feel comfortable in completing your retirement planning, you can still make your retirement plan fail-safe without hassle or worry?

1. Work with an experienced financial advisor that specializes in retirement.

2. Talk with him/her about a guaranteed lifetime income that cannot be outlived.

The huge wave of retiring baby boomers has prompted insurance companies to offer certain, predictable, guaranteed lifetime incomes that can be locked up today by using some of your retirement money. There will be a plan that is suitable for your needs. Insurance companies manage risk by spreading it over thousands of lives – the same principle used for all types of insurance. You transfer other risks (health, home, car, business, etc.) to an insurance company, why not the risk of retirement “money death”? Planning your retirement by using professional guidance and considering all the options can save your money from premature death. Investing the same as always could lead to your greatest fear: death of your retirement money before retirement ends. Can you sleep with the risk?

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