Develop an Income for Life Model for Your Retirement – Annuities and Other Options

One of the biggest challenges of retirement is going from an accumulation model to a spending model. You spend your entire working life dutifully squirreling money away, saving as much as you can and investing those funds as wisely as possible. Then suddenly you must go from accumulating all that money to making sure it lasts as long as you do.

This is a tall order, especially if you do not happen to be an MBA, stock broker or financial expert. Given the challenges, it is no wonder so many people are having such a difficult time enjoying their golden years. Many retirees find that they simply cannot make ends meet, and they end up going back to work just when they though they would be living the good life.

You can avoid this unhappy scenario by taking charge of your investment portfolio as early as possible and developing a strategy that will give you income for life, and the peace of mind you need to retire with confidence. This type of strategy can help you create a sort of retirement paycheck, and when you retire you can simply trade your employer’s paycheck for the one you have created for yourself.

Too many people focus on accumulating a set number of dollars, never taking the time to think about how much income that nest egg can provide. Without knowing how much income you can draw from your portfolio safely, it will be extremely difficult to enjoy the type of lifestyle you have always dreamt about once you finally stop working. The income for life concept places the focus exactly where it should be – on how much money you can expect to receive, and how you can structure your investments to maintain that income for the rest of your life.

Of course developing that retirement paycheck on your own can be just as hard, if not harder, than building that wealth in the first place. That is why you need to find a financial planner who shares your passion and your desire for a long, happy and financially stable retirement. Look for a planner who shares your concept of income for life, then work with that individual to develop the strategy you need to meet your goals.

Before you meet with any financial planner, it is a good idea to gather all of your investment information. The financial planner you choose will need to assess your current situation and see where you stand now before he or she can make an intelligent recommendation and help you develop the consistent income stream you will need in retirement.

Chances are you will need to make some changes to your portfolio to meet your income for life goals. You might, for instance, need to focus more on investments that provide current cash flow, be they fixed annuities, hybrid annuities, income annuities, bonds or dividend paying stocks. Moving from a growth stance to an income stance is an integral part of the income for life strategy, and it is important to weave those goals into your investment portfolio.

Your financial planner can help you run various scenarios on your portfolio, including both best case and worst cases scenarios. Running these kinds of simulations can help you be confident that your portfolio can weather any storm and continue to provide the kind of income you need, all without putting your financial future or your retirement at risk. Once you know that your portfolio is invested properly and that you are able to get the income you need, you can focus on enjoying your retirement and doing all the things you never had time to do when you were working.