When you turn 65, you’re eligible for Medicare and can enroll on the Social Security Administration’s website, or at your local Social Security office. You may be automatically enrolled in Medicare if you’re already receiving your Social Security benefits or are receiving disability benefits. Before and after you turn 65, you have an Initial Enrollment Period (IEP), where you can enroll for Medicare. It starts three months before you turn 65 and ends three months after your birthday. If you don’t enroll during your IEP, there are General Enrollment Periods, which is January 1 to March 31 every year, but there may a late enrollment penalty if you go this route.

Read more here: Your Health Care Options in Retirement

The answer, for many, is Medicare, the primary health insurance provider for those 65 and older. While Medicare does cover many of your health care expenses, it doesn’t take care of dental, vision, any hearing conditions, or long-term care, which means you have to pay for those services yourself. That’s why there is Medigap, which helps cover what Medicare doesn’t, and is useful for paying for things like annual copayments and deductibles. There’s also Medicaid, which is available for those with low income. 

Read more here: Your Health Care Options in Retirement

It may be tempting to borrow from your retirement accounts and use it to pay off some (or all) of your debt. Some retirement accounts do let you take out a loan, but be careful. The funds you take out could be taxed immediately, or they could show up on your tax return at the end of the year, so know the rules before you make a decision. Another possible option is to withdraw funds from your retirement accounts. This should also be treated carefully, because withdrawing too early on some of your accounts, usually before age 59 ½, could incur penalties. Here are possibly the biggest consequences: the loss of future earnings and taxes on what you withdraw. By withdrawing money from your retirement accounts, you may be hurting your retirement income and your compound interest.

Read more here: Paying Off Debt in Retirement

If you’re trying to prioritize what loans to pay off first, start with the bad debt, and go from there. Tackle the debt that has the highest rates and variable balances (bad debt), and then move on to the loans with fixed rates and payments. Your goal should be to knock off as much debt as you can before retirement. That way, when retirement comes, more of your income can be put in your pocket, instead of being put towards your loans. As you consider this, you should check with a financial professional to determine what would work best for your situation. 

Read more here: Paying Off Debt in Retirement

If you’re married, your decision on when to file for Social Security benefits could also affect your spouse if he or she outlives you. For example, if you file at age 62, opting to collect a reduced benefit could adversely impact your surviving spouse, because, when one spouse dies, 
only the higher of the two monthly benefits is paid to the survivor. Had the higher-earning spouse filed at their full retirement age, or even at age 70, the surviving spouse would have collected a higher survivor benefit, potentially replacing a higher portion of his or her income as the survivor and putting less of a strain on other sources of retirement income.

Read more here: When Should I File for Social Security?

When you have an introductory meeting with a financial professional, it’s important to come prepared with the right questions. To formulate some questions, start with thinking about the type of help you want from a financial professional. Then, focus on what their fees and qualifications are, what your working relationship would be like, the details about your strategy, and more. Ask as many questions as you need to help you develop a comfortable, long-lasting relationship with your financial professional. 

Read more here: Six Questions to Ask a Financial Professional in Your First Meeting

Many insurance products—annuities, for example—are designed to be long-term vehicles. The company issuing it often guarantees your principal and an interest rate specified in advance, and therefore needs to make long-term investments to ensure they can meet their promises to policyholders. Because insurance and annuity products are long-term products, the company faces market risk if policyholders want to withdraw excessive money in the early years of the policy. That's why many insurance and annuity products have a surrender charge that declines over time to zero. However, many insurance products do permit policyholders to withdraw a certain amount penalty-free during the surrender charge period (although the withdrawal may be subject to ordinary income taxes, and potentially a 10 percent federal penalty if taken before age 59 ½ for some contracts).

Read more here: Five Facts You Didn’t Know About Annuities

The protection of your money depends on where you put it. For example, bank products such as CDs are FDIC insured. Most investment products (like stocks and mutual funds) are subject to the ups and downs of the market and have little or no guarantees. Insurance and annuity product guarantees are backed by the company issuing them. Since it’s a company guarantee, you will want to know the financial strength of the company. There are independent rating agencies, such as AM Best, Fitch, Krill, Standard & Poor's, and Moody's, that provide scores. You will want to ensure the company you choose has high ratings when making a purchasing decision. You can look them up or ask your financial professional.

Read more here: Retirement Talk: Discussing Annuities with Your Spouse or Partner

Insurance and investment products each have unique features and characteristics, and neither is automatically better than the other. Investment products like individual stocks, bonds, and mutual funds involve market risk, including possible loss of principal, and are usually better suited for those who have a longer timeframe to invest before retirement. Insurance products, such as annuities and life insurance, are designed to meet different needs, such as principal protection, income, or providing money for beneficiaries when someone passes away.

Read more here: What are the Different Types of Financial Professionals?

Like many other professional careers, financial professionals are trained, tested, and licensed. They also gain knowledge through experience, work on teams, and draw on the resources of their firm. They often specialize in different areas of retirement such as Social Security strategies, annuities, or life insurance. Creating retirement strategies is usually a major part of their initial training and continuing education. Check their business card for professional designations.

Read more here: Why Do You Need a Financial Professional?

You consult doctors for medical issues and lawyers for legal issues. Your financial future is another area where you may want to consider professional guidance as well.

A financial professional can help you get a clear picture of your current financial situation and determine what needs to be done—if anything—to maintain your lifestyle in retirement. They can offer insights you may not be aware of and offer solutions not easily accessible or understood on your own—for example, products like annuities, long-term care insurance, and life insurance.

Read more here: Why Do You Need a Financial Professional?

For most, taking care of your daily finances is a do-it-yourself project. But when you’re talking about preparing for the time—potentially many years—when you no longer receive a regular paycheck, it’s time to bring in the professionals.
Retirement strategies can be complicated. Financial professionals offer a qualified outside perspective and bring years of experience to the table. To review an existing strategy or create a new one, making an appointment for a financial review with a professional may be all you need to DIY!

Read more here: Why Do You Need a Financial Professional?

This depends on several factors, including how you’re receiving your income and whether it's guaranteed. For example, income from Social Security, a pension plan, or an annuity is generally paid out for your lifetime. Many people also have a pool of other assets they use to provide additional income. How long this income will last depends on how much you withdraw, how much interest it can earn during your lifetime, and, of course, how long you live. Your financial professional can evaluate your situation and help you calculate approximately how long your money will last in retirement.

Read more here: Is Guaranteed Retirement Income Possible?

Probably not. Many financial professionals suggest that you need about 80 percent of your pre-retirement income. Social Security probably won’t be enough—and it wasn’t meant to be. Think of retirement income like a three-legged stool, consisting of Social Security, income from your pension or other retirement accounts, and your personal savings. Social Security can supplement your retirement income, but it generally won’t be enough on its own.

Read more here: How Do I Get the Most Out of My Social Security?

You will be ready to retire—from a financial perspective—when you have enough savings to provide your desired level of income for the amount of time you anticipate being retired. For example, if you needed $20,000 a year to fill the gap between income from Social Security (and any pension benefits you might have) and your retirement expenses, you might need $300,000 to $400,000 in income-producing assets and investments. A good retirement strategy and a financial professional can help you know when you’re ready to retire.

Read more here: How Much Monthly Income Will You Need In Retirement?

There are many things that could affect your income in retirement. Health expenses can be a major factor. If costs increase, your level of retirement income could decrease. Inflation— the rising cost of everyday items over time—can also affect your income. It may cost you more for groceries or at your favorite restaurant. Taxes can be another factor. Although income taxes might not be a major variable for everyone, property taxes could rise over time.

Read more here: How Much Monthly Income Will You Need In Retirement?

Not necessarily. There are different kinds of financial professionals. Some focus on planning and may charge a flat fee or an hourly fee, depending on the complexity of the situation. You determine if you will act on the advice. Others are paid on a transactional basis. Fees are often built into the product or added on as an additional charge. Others charge an annual fee based on the amount of money you have at their firm. In all situations, these costs should be clearly explained in advance. 

Read more here: Why Do You Need a Financial Professional?

First, determine how much income you may need in retirement—add up your monthly expenses for things like housing and car payments, as well as things like insurance, travel, and savings. Then subtract how much you’ll be receiving each month from Social Security and any pensions you might have. The gap between the two is the amount you need to save for retirement, or cover with a part-time job in retirement. One general rule is to try to have between $15 and $20 in savings for every dollar in the annual shortfall between retirement income and expenses. Using this calculation, if you are short $20,000 a year, you might want to have between $300,000 and $400,000 in savings.
 
Read more here: How Much Monthly Income Will You Need In Retirement?

Because Medicare doesn’t cover care in assisted living facilities or other forms of long-term care, long-term care insurance is designed to help cover what Medicare doesn’t. It usually covers expenses connected with in-home care, assisted living facilities, and nursing homes. Many industry experts suggest that you should consider buying it when you don't need it, like in your 50s or 60s, when you’re in good health and before you retire.
 
Read more here: Your 401(k) Is Not a Complete Retirement Strategy

Many retirees share these three common goals: having adequate income in retirement, helping family members during their lifetime, and providing for loved ones after death. There are a few ways to help accomplish these goals. For example, annuities are insurance products that can provide a steady monthly income during your lifetime. They can be structured as a joint and survivor annuity to provide income for your spouse when you pass away. Retirees can help with grandchildren’s educational expenses from conventional savings, if it’s practical. Naming family members as life insurance beneficiaries can provide for them after your death.

Read more here: Retirement Talk: Discussing Annuities with Your Spouse or Partner

Retirement age is different for everyone, but here are a few guidelines to figure out how much you may need in retirement. A common guideline is 75 percent to 85 percent of your current income. You may want to pay off consumer and mortgage debt while working to reduce your expenses in retirement. Also, look at your sources of income in retirement and compare them to your projected expenses. If there’s a gap, ask yourself if you have enough savings to provide the extra income. Don’t forget about inflation.

You may want to consult with a financial professional for guidance about when you can retire. They can help you create a financial strategy just for you.

Read more here: Why Wait? Three Steps to Start Your Retirement Plan Today

There are several financial vehicles that allow you to protect at least a portion of your money from market risk. For example, annuities and life insurance offer the opportunity for competitive interest rate returns when the market goes up and protection from losses when the market goes down. Some variable annuities may also offer protection of the initial amount you put in, to be paid out to your beneficiaries after your death.

Read more here: What's the Best Deferred Annuity For You?

While the exact amount will vary depending on your retirement goals and financial situation, many financial professionals recommend saving 15 to 20 percent of your annual income, beginning in your twenties. A good first step may be to fully fund your 401(k), especially if your employer matches your contribution. Many experts recommend following a series of retirement-planning benchmarks, such as having two times your annual salary in savings by age 40 and eight times your annual salary by age 67.

Read more here: How Much Monthly Income Will You Need In Retirement?

Generally, if it involves money or savings, a financial professional can help with it—presenting options, helping you evaluate your priorities, and offering advice. Financial professionals offer a wide range of services, including planning for retirement, college funding options, estate planning strategies, tax planning strategies, retirement account rollovers, guidance for starting a new business or changing employment, cash flow planning, insurance protection, and saving for major expenses like weddings, funerals, and elderly care.

Read more here: Why Do You Need a Financial Professional?

Financial professionals charge for their services in different ways. Some charge a fixed or hourly fee for the time it takes to develop a financial strategy, but don’t sell products that will help you fulfill that plan; some are paid by commissions on the products they sell; and others use a combination of fees and commissions. Your financial professional should be straightforward with you about their pricing and fee structure—just ask!

Read more here: Why Do You Need a Financial Professional?

You might! While there are many things you can do yourself to help plan your financial future, there are some elements that may require a professional. For example, a well-planned strategy might include considerations for health insurance, long-term care insurance, life insurance, or annuities. Each of those products generally require help from a licensed financial professional. Plus, optimizing your overall strategy can be complicated. Most financial professionals offer a no-cost or obligation review of your current situation. A second opinion could help confirm if you’re on track to meet your goals.

Read more here: Why Do You Need a Financial Professional?

A single retirement account, like a 401(k), doesn’t make up a retirement strategy. Unless you hit the lottery, there’s probably not one single element that will help you reach your retirement goals. A holistic retirement approach should include sources for income (preferably at least some sources that are tax-advantaged and guaranteed for life), tax considerations, protection, and legacy planning. Guidance from a financial professional can help pull it all together.

Read more here: Your 401(k) Is Not a Complete Retirement Strategy

There are typically three ways to receive guaranteed lifetime income—Social Security, a defined benefit pension from a private employer or the government, and an annuity. Everyone planning for retirement can create a retirement plan including one, two, or all three of these sources of guaranteed income. A financial professional can help you find out what retirement strategies fit your needs and your goals for retirement. 

Read more here: Is Guaranteed Retirement Income Possible?

Guaranteed income for life is a powerful concept. It means a promise of a specific payment amount that is deposited regularly into your bank account—for the rest of your life—no matter how long that will be. The amount that you will receive—once you begin taking income—is not dependent upon interest credited to your account value. Guaranteed income can continue to be received by a spouse or partner once you’re gone or, in some cases, go to a separate beneficiary.

There are a few ways to get guaranteed lifetime income—Social Security, a defined benefit pension from a private employer or the government, and an annuity. Anyone preparing for retirement has the opportunity to receive guaranteed income through a variety of sources such as these.

Read more here: Is Guaranteed Retirement Income Possible?

You may not think about life insurance also as a retirement tool, but permanent life insurance policies can provide tax-free income in retirement. Traditional retirement accounts, like IRAs and 401(k)s, are tax-deferred. That means that taxes will come out one day at an unknown—possibly higher—tax rate. With life insurance, your withdrawals are tax-free, giving you more money when you need it—like after your regular paycheck stops. And, you have the flexibility to take it when you want. Any cash value left in your active policy—after withdrawals—would become part of the death benefit.

Read more here: Your 401(k) Is Not a Complete Retirement Strategy

 

Policy loans and withdrawals will reduce available cash values and death benefits, and may cause the policy to lapse or affect any guarantees against lapse. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject to ordinary income tax.

Yes! Most people realize that life insurance provides an income-tax-free death benefit—money that goes to your beneficiaries when you die. But, according to Ed Slott, speaker/author and CPA, the income tax exemption for life insurance is also the single biggest benefit in the federal tax code. There are several reasons for this but, essentially, a life insurance policy allows your money to grow tax-free and—if you have enough cash value in your policy—you are able to take loans and withdrawals tax-free. These withdrawals reduce the total amount of your death benefit, but can be used as income in retirement.

Read more here: Five Tax Benefits that Life Insurance Can Provide for Your Retirement

 

Policy loans and withdrawals will reduce available cash values and death benefits, and may cause the policy to lapse or affect any guarantees against lapse. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject to ordinary income tax.

There are many different options for retirement income. Some of these options provide income as long as you live (guaranteed income for life) and some will provide income as long as your money lasts. The only options providing guaranteed income as long as you live are Social Security, an employer pension plan, and an annuity. Many people buy annuities to supplement Social Security to cover their retirement expenses. Life insurance can also be a part of your income in retirement and doesn’t just need to be saved for your loved ones when you die. 401(k) and IRA accounts are retirement plans designed to help you grow your money faster, on a tax-deferred basis. Taking payments directly from these accounts will only provide income as long as your savings lasts.

Read more here: How Much Monthly Income Will You Need In Retirement?

Unfortunately, retirement from work doesn’t mean you can retire from taxes. Most financial products have some taxes due when you start taking the money out and you should plan ahead to determine how taxes impact your retirement income. Generally, retirement income products fall into one of two categories: pre-tax and after-tax. Pre-tax means that the money you contribute to the account has not been taxed as ordinary income. 401(k)s and IRAs, including Annuity IRAs, are examples of pre-tax retirement accounts. Money earned in the account is not taxed right away either—any interest or earnings are tax-deferred. However, you will owe ordinary income taxes on all of the money when you withdraw it. 

After-tax accounts are accounts paid for with money that has already been taxed as income. With after-tax accounts, you typically owe income taxes only on the amount earned in excess of the money you paid in. A Roth IRA is a unique after-tax account where you can set aside after-tax income, up to a specified amount each year, and both the amount you paid in and the additional earnings after age 59½ are tax-free, if the account has been open for at least five years.

Read more here: Five Tax Benefits that Life Insurance Can Provide for Your Retirement

A deferred annuity gives you a consistent source of income for your retirement years, and may be an effective way to help grow and protect your money and protect you from outliving your income. However, while the payments can be helpful during retirement, there are penalties for withdrawing from your annuity before age 59½, or in excess of your penalty-free amount. If you choose a variable annuity (an annuity tied to the stock market), there is market risk involved, depending on how the investment options you choose perform. Variable annuities can include higher fees to cover the investment choices, administrative costs, and contract charges. A fixed annuity comes with no market risk, guaranteeing that you won’t lose any money from negative economic conditions or investment markets, and your money will earn at least the guaranteed interest rate. If you choose a fixed indexed annuity, your money has the potential to earn interest when the market goes up, and you won’t lose money if it goes down.

Read more here: What's the Best Deferred Annuity For You?

It depends on the type of annuity you have. If you have a variable annuity, you invest money in the market through underlying variable investment options called sub-accounts, and your annuity earnings are based on how the sub-accounts you choose perform. You may gain or lose money in your variable annuity, depending on your investment choices. With fixed annuities, you do not invest your money directly or indirectly in the stock market. The insurance company will declare an interest rate it will pay you, or they will calculate your interest based on the performance of a market index. Fixed indexed annuities are popular with many because you can earn interest when the market index goes up and you don’t lose money when it goes down.

Read more here: What's the Best Deferred Annuity For You?

There are different kinds of annuities and each have their own benefits and risks—many of those revolve around how open you are to market risk versus your desire for principal protection.

With variable annuities, you invest indirectly in financial markets. This gives you a higher potential for gains, but with that comes a higher risk of losing money in the market.

Fixed annuities protect your money from market fluctuations but offer less potential growth. A type of fixed annuity, called a fixed indexed annuity, can provide a bit of both—the opportunity to earn interest based on a market index and a guarantee of principal protection.

And, when it’s time to take money out, the benefits of annuities really shine. Your payments are guaranteed for life, eliminating the risk of running out of money before you do.

Read more here: What is a Required Minimum Distribution and How Does it Affect Certain Types of Annuities?

Yes. If you’ve just purchased an annuity but have doubts about the insurance company, fees, or something else, there is a period of time, known as the free-look period, during which you can receive a full refund, and you do not have to give the company a reason. The free-look period varies by state and is typically between 10 and 30 days. So, if you decide you want to return the annuity or change something about your annuity, there is an opportunity for you to make adjustments.

Read more here: Five More Facts You Didn’t Know About Annuities

While payments from your annuity may cease at the end of your life, some fixed annuities will continue to pay out beyond your own lifetime. For example, you may choose to add death benefits to your annuity that will guarantee income for your chosen beneficiary for a set period of time after your death, or until a minimum amount has been paid out. If you have a joint annuity with a spouse who outlives you, the annuity will continue to pay out for the remainder of their lifetime. Most annuities can avoid the time and cost of probate with a properly-named beneficiary—another benefit to using annuities in your estate planning strategy.

Read more here: Understanding the Basics of Estate Planning

While annuities aren’t tax-free, they do offer tax advantages. Money placed in an annuity grows tax-deferred. As you earn interest, you won’t pay taxes until you start receiving payments. Most likely that will be after you’ve retired, when your tax rate may be lower. Because annuities are designed to be long term products for retirement income, any withdrawals before age 59 ½ will also be subject to an additional 10 percent federal penalty.

When you begin receiving payments from your annuity, your payments typically will be taxed at ordinary income rates. Depending on the type of annuity you purchased, either all of your annuity payments will be taxed as income, or just the payments on the interest earned.

If your annuity was purchased with before-tax money (you never paid income taxes on the money that you paid into the annuity), all your payments will be subject to income taxes. If your annuity was paid with after-tax money, your payments will be paid on a last-in/first-out basis. Essentially, this means that for tax purposes you are receiving your interest earnings first, and the money you paid in second. After all payments have been made on your interest earnings and the value of your annuity equals what you paid in, your remaining payments will not be taxed.

Read more here: Five Facts You Didn’t Know About Annuities

Annuities differ based on whether payments begin right away or on a date you choose in the future. Annuities that make payments right away are called immediate annuities. Annuities where payments can begin in the future are called deferred annuities. Deferred annuities are either fixed or variable. Fixed deferred annuities guarantee the interest you earn for a set period of time and protect your annuity from market losses. Variable annuities let you participate indirectly in the market by purchasing underlying (sub-accounts), which invest in mutual funds, and you can experience both gains and losses, depending on the performance of the investment options you have chosen. While you can suffer losses to your variable annuity savings, many variable annuities offer options (at additional cost) to help protect your savings from losses.

Read more here: Retirement Talk: Discussing Annuities with Your Spouse or Partner

There’s no hard and fast rule when it comes to retirement, but many financial professionals suggest planning for retirement as early as possible. If you can, it’s a good idea to start putting money away in your 20s. If you start later, know that you may have to save more each year, depending on your retirement goals. Talk to a financial professional to figure out when and how to start planning. 

Read more here: Why Wait? Three Steps to Start Your Retirement Plan Today

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