Weeding out the truth about Social Security and retirement strategies can be difficult since there are so many different slants on what is supposedly "best". Questions about market performance, risk tolerance, the economy, inflation, and concerns about the future of social security haunt us as we try to plan or enjoy our well earned retirement.
There are ways we can overcome the fears that the media emphasizes and politicians are quick to instill to get our vote. First it is important to identify exactly what you want your money to do in retirement and then determine how to make it happen by learning what you can do with your money. Consider the following:
Most seniors want to be sure they do not run out of money and can maintain their lifestyle with a bit of fun as a bonus. In order to make that happen, you need income either from Social Security or your savings/retirement account or both. The income has to equal your expenses without depleting your savings/retirement account. Elementary as it sounds, very few people put it in such simple terms.
Income is a factor that few consider as much as they do growing the bucket of money in their account. Many seniors have no idea how to spend some of their savings and not worry about running out of money, because it is not possible to budget for a down turn in the market. Inflation is a factor, but nothing is more devastating or stressful as worrying about losing large percentages in their retirement account.
2. Social Security
What many of us do not consider is that Social Security is designed to replace only 40 percent of our income and is not something that should be relied on for survival. Minus Social Security, how do take your bucket of money and turn it into a guaranteed income for life? It needs to grow after the cost of taxes is factored in.
Many people still rely on stock accounts that include mutual funds, variable annuities and bonds. Growth may or may not occur and there is no way to predict how much we will have day to day. Risk is a concern and most financial professionals will only allow you to live on 2 to 4 percent of the value of your bucket of money. If you like gambling and the unknown, this plan is for you. Many feel it is worth the risk, but getting rich in the market mainly happens to those who take on huge risk and know when to take out funds and protect.
Banks have Certificates of Deposit, which are safe from loss but cannot keep up with inflation due to the low interest they earn today. Also the dividends of a stock account and the earning in a CD add to your taxable income.
The good news is there are strategies using insurance products that not only provide for a 7-8 percent plus pay out on your bucket of money, are guaranteed for life and the growth on it is tax deferred. Income is secure, taxes are managed so you most likely pay zero taxes on your Social Security and you have little worry about running out of money
There are also strategies that provide tax free income, long term care protection, and death benefits that keep up with inflation. You can also use these strategies to put income you do not need today to protect your social security payments from taxation.
Few people are aware there are guaranteed strategies that ensure that your highest possible income is guaranteed, usually keeps up with inflation and provide tax savings.
To receive a free consultation to see if you qualify for tax free retirement income that is guaranteed for life, please call, Blumhorst and Associates, 210-745-5804.
Susan Blumhorst is an Insurance Professional with her Masters in Counseling and is the Managing Member of Senior Path Specialists. .. Read More About Susan Here
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