by Dave Kutcher
Did you know more than 11,000 people per day reach age 65 in the U.S.? That’s over 4,000,000 people over the next few years. This is a significant change in our make-up as a country and impacts us in so many ways.
What is particularly concerning for us as retirement focused planners is whether this large a group of people are prepared for and able to navigate this important time in their financial lives.
Over the last several years, how people prepared for retirement has changed significantly. Company sponsored pension plans, otherwise known as defined benefit plans, have waned and were replaced with defined contribution plans such as 401(K) plans.
While people have accumulated significant assets in these plans, when the end game arrives and it is time to disburse the funds that have been accumulated, the peace of mind and sense of security provided by lifetime income guarantees is missing.
The missing puzzle piece is even more concerning when one considers the ever-rising cost of healthcare for retirees, the impact of inflation on basic household needs and the potential for investment volatility to thwart even the best of plans.
The conundrum noted above begs for solutions that include guaranteed income that will walk, talk and act more like the income distribution plans of old, the defined benefit plan.
While exposure to the investment markets remain essential to counter inflation during retirement, positioning some of your retirement plan assets to provide guaranteed income that will cover basic family income needs and avoid market fluctuations can significantly help in securing a more predictable outcome in the retirement years ahead.
Additional benefits and features of establishing a plan that includes guaranteed lifetime income for you and your spouse include the ability to more aggressively seek long term growth opportunities in the markets, provide a more predictable planning model to better manage things like required minimum distributions – which can help you facilitate better tax planning strategies, provide options for pay-out plans that can be tailored to many different scenarios and provide peace of mind that you are better suited to avoid outliving your assets in the long term.
Finding suitable solutions and discerning how best to utilize these plans can be confusing and difficult. Don’t try and navigate this road by yourself. Seek help from a professional who has access to and thorough working knowledge of what is available and at your disposal and don’t wait until the last minute to start your planning process. The earlier you begin positioning and planning, the more likely you will be successful in meeting your long-term retirement goals and objectives.
My name is David A. Kutcher, a retired Marine Corp Captain. My business partner in the lower 48 is Richard C. Scott, CLU, LUTCF. For nearly 40 years we have been helping folks with their personal retirement decisions. We encourage you to make an appointment and get ahead of your concerns as early as is possible. You can catch us on the radio every Saturday morning, “Retirement in the Last Frontier”, 8:30-9:30 on AM 650, Keni Radio and on Tuesday mornings, KFQD News Talk Radio AM 750 and FM 103.7. Frontier Retirement, 10928 Eagle River Road; Eagle River, AK 99577; (907) 795-7452.
