The New Retirement Environment

A new trend among baby boomers is waiting until age 70 to maximize their Social Security benefits and take their required minimum distributions at age 70½. Working an additional four to five years can improve your ultimate retirement income. Even after age 70, some will be living a hybrid retirement; working part time and receiving their retirement benefits. For those who can afford to delay their required minimum distributions, the strategic use of Qualified Longevity Annuity Contracts (QLACs) can defer payments to age 85. In the old retirement paradigm, you wouldn’t defer income to age 85 because your life expectancy wasn’t that long. But with medical advancements, proper diet and ongoing exercise, life expectancy is predicted to increase well into your 90s. Longer life expectancy is now the real X factor in retirement and puts enormous pressure on portfolio performance.

For most Americans, the retirement environment may change from accumulating assets to purchasing blocks of guaranteed income. One purchasing strategy for purchasing blocks is buying several deferred income annuities and staggering the distribution start dates, i.e., starting one block of income at age 70, another at age 75 and another at age 80. In this example, at age 80, you’re receiving income from all three deferred annuity contracts, just when you need them most. Because the real cost of retirement is medical and long-term care in your 80s. Deferred income annuities—similar to single premium immediate annuities—can provide guaranteed lifetime income you can’t outlive. Watch the interview with financial advisor and author Eric Judy taken from the talk show, Right on the Money. Eric explains some of the annuity options available for retirees to consider. Eric has also co-authored The New Retirement, a Paradigm Shift. http://rightonthemoneyshow.com/the-five-fears-of-retirement-right-on-the-money-eric-judy/

¹ Deferred Income Annuities are not insured by the FDIC or any government agency. It’s important to have your financial advisor review the balance sheet and ratings of the insurance company before you purchase an annuity.