Jerry Golden on Retirement

How interest rates affect income annuity choices

March 15, 2017 By Jerry Golden in Annuity, QLAC Tags: Annuities, Baby Boomers, Guaranteed Income, retirement income

The one thing nearly every professional financial advisor will agree upon, no matter what their specific approach, is that it’s very difficult to time the stock market. Money managers who are celebrated as stars one year — because they spotted something the rest of us didn’t see – may be bums the next.

The same truth applies to the more mundane world of interest rates. Though interest rates don’t tend to soar and crash with the drama of the stock market, the only sure way to detect trends is with a rearview mirror.

So when a 65-year-old woman visited Go2Income to calculate how much money her savings could provide, she remained hesitant. She knew how much income a QLAC she was considering would pay at age 85, but she wondered if she could get more income by delaying her investment in the hopes that interest rates would rise and insurance companies would offer better QLAC rates. More

Get numbers first for better retirement decisions

March 1, 2017 By Jerry Golden in Annuity, QLAC Tags: Baby Boomers, Guaranteed Income, Jerry Golden, QLAC, retirement, Social Security

Many experts tell you to base decisions on your “gut” reaction, and often that is a good and accurate way to make up your mind, such as when you meet a politician face-to-face for the first time or your daughter brings home a new boyfriend.

But when you are making decisions about your financial future, it’s usually better to rely on reason and fact, such as numbers that you can calculate. After you have looked at the analysis and the potential results, you can make a decision that fits your life and personal preferences. More

The perfect Valentine’s Day gift? A lifetime of income

February 14, 2017 By Jerry Golden in Annuity Tags: Valentine's Day

Think of the many ways to say, “I love you” around Valentine’s Day.

There’s candy, roses and, for the person you plan to spend the rest of your life with, a lifetime of income.

Even I might have questioned the romance of this idea but I recently spoke with a client whose interest in deferred income annuities, specifically a QLAC, stems from his deep love and concern for his wife, who happens to be much younger than he is.

He is 73 and retired. She is 60 and beginning to put in place the process for her own retirement at 65. Both have a life expectancy between 85 and 90. But because he’s much closer to that age, the actuarial tables have her living about 10 more years after he passes away, and of course she could live much longer, too.

So his thinking was that when she reaches 85, he’d likely have passed away and he wanted income from a QLAC to start at that age. More

For a solid retirement, look back from the future – Part II

January 24, 2017 By Jerry Golden in Annuity, Two-stage retirement Tags: Annuities, Guaranteed Income, personal savings, retirement income, Social Security, tax planning

To paraphrase Marty McFly, who time-traveled between the 1950s and the 21^st century in a souped-up Delorean sports car, the key to a successful retirement is to plan “back from the future.”

Actually, Marty didn’t concern himself with retirement. But imagine how the rest of us could improve our retirement planning if we had a glimpse of what will really happen 20 or 30 years from now. We would know exactly how to invest our savings, what the cost of living or market returns will be, and what happens to our health, our kids and grandkids.

Alas, to quote another great mind, physicist and philosopher Niels Bohr, who won a Nobel Prize, “Forecasting is particularly difficult, especially concerning the future.”

That leaves us only with planning from the present.

Even as we all hope to live long and healthy lives, you’ll be a better planner if you anticipate what might go wrong in retirement. I said in the first part of this blog that I would tell you how and when to plan for the basic retirement objectives that will bring a bright retirement future. I call them the Three Ls: lifetime income, liquidity and legacy.

Stage I of retirement and Stage II

Good decisions, good timing improve retirement (Part I)

January 20, 2017 By Jerry Golden in Annuity, Two-stage retirement Tags: Annuities, Guaranteed Income, retirement income, Social Security

I read two books over the holidays that, while written for a general audience, can provide crucial insights into retirement planning. The first was a biography of two brilliant psychologists called “The Undoing Project,” by Michael Lewis. The second was “Time Travel: A History,” by James Gleick.

How are books about psychologists (Kahneman and Twersky) and time travel related to retirement plans?

My own insight is that a successful retirement is mostly about making decisions in the present – a lot of them financial – combined with a vision of how you want your future to look. If people understood how the decisions they made today influence their future, they would create a more secure and financially rewarding retirement for themselves and their families.

Lewis’ book suggested that people often make less-than-rational decisions, especially when comparing alternative choices. And when it comes to money, it’s even more challenging.