These days people are living longer; babies born in 1900 typically did not live past 50. Today, men can expect to live until 84.3 and women to 86.6. Which means it’s important for people to plan for a long retirement. How are these octogenarians maintaining financial sanity? One way is to include annuities in their retirement planning.
While there are different types of annuities, there are two primary kinds: immediate and deferred. An immediate annuity, as the name implies, pays out income (almost) immediately. A deferred annuity allows you to accumulate money until you’re ready to retire, then you have the choice to turn it into an income stream. Based on your goals and age, a financial planner can help you to select the best one for you.
Those nearing retirement can rely on Immediate Annuities to begin receiving payments for as long as you live, or for a shorter time period you select. Payments start based on the frequency of payments you chose. For example, if you choose monthly payments, they start one month after the premium is paid. Annual payments would start after one year. . Whereas those who have decades before they plan to retire may opt for deferred annuities, which would help them reach long-term goals (like moving to the beach in their golden years).
Even if you are a recent graduate, it is never too early to begin saving for retirement; in fact, it could help you get a sunny beach house too. With the number of people 65 or older across the globe reaching 1,500,000,000 by 2050, we need to encourage our friends and relatives to save like never before.
Careful planning during your working years can allow you to pursue a new hobby and travel during your retirement.
Not sure how much you will need to save for retirement? Contact us today!