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How to Help Make Retirement Income Last

Building up a retirement nest egg is one thing, but making it last throughout your lifetime is quite another. With a larger share of the financial responsibility for retirement shifting from employers to employees, it’s more important than ever to explore all income strategies to help determine what is most appropriate for your situation.

One thing to consider is your Social Security benefit strategy. For many, the spousal benefit is based on the primary earner’s level of income. While you might be tempted to start taking benefits as soon as possible, there may be good reasons to delay. First, the longer you wait (up until age 70, when increases cease), the higher your payout for life. Perhaps more importantly, waiting to take benefits could leave a higher benefit for your spouse should you pass away.

Remember, if you take a lower benefit early, your surviving spouse may receive that reduced amount for the rest of his or her life. A surviving spouse receives the higher benefit, whether it’s their own or their spouse’s, but the household will no longer receive both. Since Social Security represents the only guaranteed income stream for many of today’s retirees, it’s a good idea to consider ways to delay starting the benefits in order to potentially increase that income stream.

In addition to a Social Security strategy for lifetime income, the following are other financial vehicles typically used to provide long-term income and/or growth opportunity in a well-diversified financial strategy.

Bonds — While traditional bonds can provide a reliable stream of income, they come with a maturity date. At that point, an investor must decide where to reinvest the principal. One strategy is to hold a selection of bonds with varying maturity dates. Investors can also take advantage of the inherent diversification provided by bond funds by letting a professional money manager make ongoing decisions about where to reinvest assets from maturing bonds.

Dividend-Paying Stocks — Stocks with a strong history of paying dividends also offer a source of ongoing income. Here, too, investors may prefer to buy a dividend income fund to take advantage of a fund manager’s buy and sell experience. It is important for investors to understand that dividends are paid at the discretion of the board of directors and are therefore not guaranteed.

Annuities — There is a wide range of annuity options that can be tailored to a retiree’s specific needs. Many offer a fixed level of income for a specific time period or for life and can be customized with optional benefits, such as income riders that increase income payments commensurate with inflation. Please note that optional riders may not be available on all products and may have an additional cost. Fixed index annuities offer individuals the potential for interest credits based on positive changes of an external index without actual participation in the market, while still receiving certain guaranteed protections backed by the financial strength and claims-paying ability of the issuing insurance company. The amount of interest you receive from a fixed index annuity can vary, and there is a limit on how much interest you could earn.

 

The content provided here is designed to provide general information on the subjects covered. It is not, however, intended to provide specific legal or tax advice.  Contact us at info@securedretirements.com or call us at (952) 460­-3260 to schedule a time to discuss your financial situation and the potential role of investments in your financial strategy.

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Ryan Keapproth

Ryan Keapproth

Financial Advisor

Ryan is dedicated to serving clients to achieve their retirement goals. Ryan’s holistic approach centers on wealth management strategies with a focus on income planning throughout retirement. As a Financial Advisor, Ryan is an Investment Adviser Representative (IAR), life and health insurance licensed and a Certified Tax Preparer. Ryan is a graduate of the University of Minnesota, with an Accounting and Finance major.​

Ryan is a lifelong Minnesotan originally from Woodbury and currently residing in Bloomington with his wife, Riamae, and their rescue Terrier Beagle mix, Douglas. Ryan and his wife are avid travelers as Riamae is originally from the Philippines. Ryan describes himself as a major foodie enjoying new restaurants around the cities whenever possible. Ryan enjoys playing golf and poker. He is a sports fan especially when the Vikings and Timberwolves are playing. In his formative years, Ryan tended bar at various places including Mystic Lake and Running Aces in Columbus, MN where he met his wife.  

We’re glad to have Ryan part of the Secured Retirement family too!