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It's never too early to start thinking about retirement. It comes up on you fast, and when you are focused on working and living your life from day to day, it's easy to forget about it and neglect to prepare. But that would be a major mistake.
Another mistake would be to rely on a single source of income for all of your retirement income. A diversified portfolio is much safer and much more promising.
Here are 5 of the best strategies for developing a retirement income protection plan that will work for you!
1. Use Social Security As Supplemental Retirement Income
Most people end up relying on Social Security income much more than they would like - and while SS benefits should be a key part of your retirement income plan, they should by no means be the only (or even necessarily the main) component.
Don't wait and do nothing and end up with 50% to 90% of your income in your retirement years from Social Security. There are better ways to protect your financial future.
2. Income From Pension Plans
One of the most important of all employee benefits to look for is a valuable, reliable pension plan. When you get to having a career instead of just a temporary job, earning an income stream that will stay with you for life is as important as your check to check earnings.
If possible, get into a defined benefit pension plan, where you get a set retirement income based on how many years you worked with the company. For example, you might get 40% of your highest annual income during employment.
3. Make a Portion of Your Retirement Funds Safe from Market Declines
On top of higher risk investment strategies to grow your retirement nest egg, some retirement income protection strategies, like adding a fixed index annuity (FIA), will help your savings grow while also protecting it from loss during market declines.
Some FIA’s will provide lifetime income protection, while offering long term tax deferral and safe, reliable earnings that ride out market stress. The benefits to FIAs are many, and can add stability to your retirement plans.
4. Tax-deferred Savings Plans
Another major way to build a retirement nest is via a 401(k) or other similar tax-deferred savings accounts. These kinds of accounts are typically offered to you by your employer, and your employer may even match the funds you put into it.
You won't have easy access to the money in these qualified savings plans until age 59 ½ and once you withdraw the funds, they can be taxed like regular income. But if you are already retired, you will likely be taxed while in a much lower income bracket than if you had taken the income earlier in life.
5. Miscellaneous Other Sources
If you get creative, you will find there are many other ways to create an extra income source during retirement. One example is life insurance that will earn a cash value over time like whole, or universal life policies. Which also provide for your loved ones after you are gone.
There are also the possibilities of making personal investments on the stock market, investing in a private retirement plan (like an IRA or Roth IRA), or even continuing to work on a reduced schedule during retirement.
There are alot of advisers who can help consumers prepare various retirement strategies but only a few specialize in a Safe Money approach. To talk to an experienced consultant who specializes in retirement protection services, contact Summerlin Benefits Consulting today!