When most people save for retirement, they do so with the expectation that after they cash their last paycheck, they will have enough money in savings and investment assets to carry them through the entirety of their lives. They feel secure in knowing that they have money tucked away, so they rarely consider the worst-case scenarios.

What if they face a massive investment loss shortly before or after their retirement? What do they do if they spend most of their savings in the first decade of retirement, only to live another ten years?

Without a steady paycheck, retirees don’t have a fixed source of monthly income or a way to guarantee that they will be able to pay their bills during their sunset years. They need a plan – and Goldstone Financial Group is prepared to offer a few suggestions.

In this episode, firm principal Anthony Pellegrino provides a few insights into how those planning for retirement can establish a predictable income stream before they lose the security of their monthly paycheck.

According to Pellegrino, one of the best options available to retirees today are annuities. These investment vehicles come in all varieties, each with their pros and cons. An annuity that works for one person may be financially damaging for another – and as such, it is essential to consult a certified fiduciary before signing up for one. In this video, however, Anthony Pellegrino provides two examples of annuities that may be helpful for some retirees.

Example #1

At age 60, you place $250,000 in an annuity account. This account will give you a bonus of six, seven, or even eight percent for signing up if you agree to a ten-year term. Throughout the decade, that percentage bonus will generate an additional $28,000 for your retirement fund.

Some annuity packages also come with a Home Healthcare Doubler, which would effectively double your income during the years that you might need assistance with two or more of the six active daily living (ADL) needs such as bathing, eating, or walking. It is worth noting that the doubler benefits only apply up until a set age ceiling; after that, the income provided would revert to the original amount.

Example #2

Let’s assume that you place that same $250,000 in a different variety of account. In this scenario, you have the security of a floor beneath your initial contribution. Even better, the annuity is designed with a built-in inflationary hedge. Every time the market trends upward, you will see your annual income increase by the same percentage – and when the market trends downward, your income remains fixed at its previous yearly amount. As a bonus, these accounts can also be structured to include a clause for spousal continuation, which would allow the account holder’s spouse to take ownership of the annuity if they pass away.

Most retirees hope to build and build – but they don’t have a plan in place for establishing a stable income stream. Goldstone Financial Group can help! Reach out today to consult with a certified fiduciary.