Jerry Golden on Retirement

Lifestyle changes raise the question: rent or buy?

March 1, 2016 By Jerry Golden in Annuity, Social Security 2 Comments Tags: Dependable spendable income, retirement, Social Security

Sarah loves the house she has lived in for 35 years. She and her husband bought it together and after the couple divorced, Sarah raised her two daughters there. The years have passed quickly and at the age of 72 she wants to downsize. Happily her girls still live nearby with their families so she is going to stay in the area.

Now Sarah is tackling the classic question:

Should she rent or buy her next home?

Sarah will have to consider how her money will serve her better. Can she sell her house and buy another for a lower price, which would help her finance the rest of her living expenses? Or would renting free up more of her capital?
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Plan for a two-stage retirement to avoid running out of money

February 23, 2016 By Jerry Golden in Annuity 7 Comments Tags: Dependable spendable income, Guaranteed Income, retirement

One flaw with traditional retirement planning is the assumption that your expenses – the type and amount — will be the same (plus inflation) each year, from your final day at work to the end of your life, and that all you have to do is “replace a percentage of your pre-retirement income.” As people live longer, we have proof that isn’t true. Healthcare costs, especially, increase in our late retirement years, and if we don’t plan for them, we risk running out of money.

The solution is to consider retirement as a two-stage process. In the first stage, you do want to cover a reasonable percentage of the final salary you earned before retiring, although the percentage may need to be more than 100%. Your Social Security payments, any pension, interest/dividends and payments from income annuities ideally will cover that. If you need to withdraw principal, make sure it’s for a temporary period and from a secure source.

For the second stage, you will want to maintain those payments to meet your essential living expenses – and add another level of income to cover the gap for things like home healthcare and additional costs that occur as we age. More

Add guaranteed income to your retirement and worry less about the market

February 16, 2016 By Jerry Golden in Annuity Tags: Dependable spendable income, retirement income

When considering retirement, an obvious truth is that your approach should be different based on your age. In your 20s, 30s and 40s, you should be automatically putting money into your retirement account and pretty much ignore what the market is doing. You shouldn’t be too worried about what the level of the stock market is because you will benefit from so-called dollar-cost averaging, which over time allows you to buy into the market at a low average cost.

A man holding a card in cupped hands with a hand written message on it, Future. — You may not be able to predict the future, but you can feel a lot more confident about it.

As you get closer to retirement, you must begin to figure out how much income you will earn from various sources to allow you to support your lifestyle. At this stage, individuals become very aware of exactly how much money they have and their behavior changes as a result. For instance, it’s normal to get nervous – or even panic – when the market crashes if it directly affects your living circumstances. More

When the government gives retirement advice, should you listen?

February 9, 2016 By Jerry Golden in Annuity Tags: Annuities, Guaranteed Income, retirement income

It is admittedly no simple task to plan one’s retirement with confidence. Even the federal government isn’t entirely clear on its recommendations to individuals who are working to prepare for a financially secure future.

White House Conference on Aging endorses income annuities — Government retirement advice

On one hand, the Internal Revenue Service last year created rules that allow us to invest part of an IRA or 401(k) in a Qualifying Longevity Annuity Contract, or QLAC. This financial product can guarantee a substantial lifetime income late in retirement in return for a lump-sum investment before or early in retirement. It is a special form of a deferred income annuity.

On the other hand, the White House Conference on Aging, which issued its final report last month, also endorsed income annuities, saying: More

What’s Your Number? Six Reasons Retirement Calculators May Fail Individual Investors

January 26, 2016 By Jerry Golden in Annuity 4 Comments Tags: Annuities, Guaranteed Income, retirement income, Social Security

A pop-up appeared on my computer screen offering to calculate my “retirement number.” The message said it could tell me the amount of savings I’ll need to retire comfortably. I’ve seen these enticements before, usually offered by a well-known and highly regarded financial institution. Even the robo-advisors and their calculators are carbon copies of the industry’s accepted approach.

Unfortunately, these calculators are not the best way to plan your financial future.

I don’t question the so-called Monte Carlo investment algorithms used to simulate market returns. What I do fault is the entire premise of extending that simulated market performance to individual investors’
personal retirement plans. An individual investor is not a pension or endowment fund with other sources to draw on, or with a virtually perpetual existence. More