Protecting Your Retirement Nest Egg
Your nest egg consists of the money you saved while working, and the interest earned on that money, in preparation to enjoy a comfortable retirement. Your new goal should be to protect your nest egg by removing the risk of losing some or all of it due to market reductions or crashes, by managing your retirement with safe accounts.
Regardless of which plan you choose, you generally have many options available to ensure you achieve and maintain your retirement goals. Take a look at the details below and then talk to one of our experts to show you those options.
Defined Pension Plans
Employer sponsored plans that generally pay a set amount based on a variety of factors such as years of service, pay scale and age. Some plans also offer a lump sum option, allowing you the opportunity to shop for better financial payout options. Additional considerations are spousal considerations, where your spouse is entitled to all, or a portion of, your retirement plan. Generally, this reduces the amount you receive, but protects your spouse if you die first.
Defined plans are mandated by the US Government to be fully funded. Unfortunately as we have seen all too often, sometimes plans become underfunded, which results in a reduction or loss of this earned benefit. Proper planning can help relieve the possible loss of your plan.
Employer Sponsored Plans 401k and 403b
Generally include retirement saving in 401(k) and 403(b). Many of these plans are unavailable for you to access until you retire from your company. Upon retirement, you generally have full access to your account. Many options are available including lifetime income and investing in plans with guaranteed interest rates, or other low risk market index options.
Individual Retirement Accounts (IRAs)
Accounts set up by individuals who do not have an employer plan, or wanted to have more control over their retirement plans. Rules applicable to these plans include not being able to access the funds until age 59 ½ or you incur an IRS penalty or 10%. Additionally, you are required to withdraw a percentage of your savings each year after age 70 ½ (The Required Minimum Distribution) based on a formula mandated by the IRS. The same options are available as mentioned above.
Social Security
The future of Social Security is uncertain at best. Many experts predict Social Security will be bankrupt by 2034! Many options are available to you to protect against this potential loss. Social Security makes up a large portion of expected retirement income for many people. Similar to a defined pension plan, many options are available for you to maximize how much your monthly benefit will be, and at what age you should begin taking your benefit.
If both you and your spouse are on Social Security, it can be a sizable portion of your Retirement income. What happens when you or your spouse die? If previously married, you may have better options via that spouse’s Social Security. We guide you through this process ensuring you have a solid understanding how it works, while providing you with many options to offset a loss or reduction of your social security income.