Retire Safe & Tax Free - What GOA Found

66% of Americans say they are worried about not having enough money for retirement. . .

Sign pointing to work or retire

As life expectancy increases, the risk that retirees will outlive their assets is a growing challenge. Thus, ensuring income throughout retirement requires difficult choices.

In a recent Report to the Chairman, Special Committee on Aging, U.S. Senate, the GAO recommended that retirees systematically draw down their savings and convert a portion of their savings into an income annuity to cover necessary expenses. The GAO believes the annuity is preferable in establishing a monthly income instead of taking lump sum withdrawals to pay monthly expenses.

Experts also recommended that individuals delay receipt of Social Security benefits if feasible until reaching at least full retirement age and, in some cases, continue to work longer while attempting to save additional monies.

To navigate the difficult choices on income throughout retirement, the GAO noted strategies depend on an individual's circumstances, such as anticipated expenses, income level, health, and each household's tolerance for risks, such as investment and longevity risk.

Regarding the choices retirees have made, GAO found that most retirees rely primarily on Social Security and pass up opportunities for additional lifetime retirement income. Taking Social Security benefits when they turned 62, many retirees born in 1943, for example, passed up increases of at least 33 percent in their monthly inflation-adjusted Social Security benefit levels available at full retirement age of 66.

Amazingly, too few retirees purchase an annuity to guarantee a lifetime income in spite of the many alternative programs available to them. Instead, retirees tend to draw down too much of their retirement monies in the early days of retirement not realizing the tremendous impact it will have on their financial security later in life. At the same time retirees are creating the risk of running out of money to cover their monthly expenses.

Today, companies selling annuities can illustrate lifetime annuity income for participants. Now, participants can now choose which company provides the better features and benefits for their investment. After all, in today's economy how else can successful people plan their retirement years to be free of fear over running out of money?

Contact: Marc H. Weiss, Archer Weiss Insurance and Financial Services

(818) 610-8560