Is your retirement income running out or do you think it might? Are you taking out more retirement income than your investments are growing each month? It is dangerous game to play but it might be time to change the rules in your favor.
If you are taking income from investments that are down or aren't growing like they are supposed to then watch out! It's not realistic to not need money even though your investments are down but do everything possible to avoid it.
What do you do instead? There are two ways to replace your retirement income.
The first one no one likes to hear, go back to work.
If you are like most people you would rather burn your house down and move to Mexico! Maybe nothing that drastic but you know what I mean if that is you.
The second way is much better and can work as well as the Mexico idea if you follow the rules and stick to the plan.
The second way to replace your income is to change how the money is invested.
It is not really replacing your retirement income so much as changing how your money is generated.
A fixed indexed annuity can provide a guaranteed income while keeping access to your principal.
For example, if you need $40,000 per year from your $1,000,000 in assets and the market goes down 30% you now only have $700,000 to work with.
Your easy 4% with drawl has now turned into 6% and you lost $300,000.
You will have to recover your initial investment and with a 6% drag on performance, your retirement income, and it will take quite some time to recover.
In contrast, a fixed index annuity with an income guarantee can provide your retirement income.
So you get your $40,000 and your principal will not go down so you don't lose any money.
To keep it easy let's assume there is a zero return or flat year with no growth now.
After taking out your annual withdrawal you would have $660,000 in the market investment and a $940,000 left in your indexed annuity.
Your guarantee says you will never have to take less that a certain percentage no matter what your annuity value happened to be.
The income guarantee makes sure you will never run out of retirement income.
Next, the market goes up 10%.
You would have $726,000 in your market investment and $1,034,000 in your indexed annuity.
See the difference? If you are running out of retirement income then take a look at the fixed indexed annuity.
Be sure to go over the details with a competent professional.
If it works for your situation then welcome to the world of no more stock market roller coaster and financial stability!