Recently, AIG released a list of topics to discuss with your financial advisor about guaranteed monthly income. As you approach retirement it is always important to do heavy planning so that you are not blindsided by unexpected expenses, but many people think of retirement planning just in terms of accumulation when it is also critical to consider guaranteed monthly income.
Why Is Guaranteed Monthly Income Important?
Having a guaranteed monthly income during retirement that is protected from market fluctuation is very helpful for budgeting since you can budget around your income rather than around a section of savings.
Questions For Your Financial Advisor
Several questions surface around the topic of guaranteed monthly income, and you should consider asking a financial advisor about these questions.
- How much monthly income will I need?
- Discussing and calculating with a financial advisor how much you will need in the future is critical for setting yourself up for a comfortable retirement. Discuss topics such as your current expected protected income, your accumulated savings, and how much of your income you can protect from economic downturns.
- What if my expected monthly income is less than I need?
- Discussing options to get the income you need with a financial advisor is a great idea, and if you have this question an annuity might be a good option for you.
- Are there costs associated and what happens if I need to withdraw money early?
- This can vary by the different annuity options. Talk to your advisor about your annuity options and what their plans’ associated costs are.
- Can annuities help protect me from losses?
- Annuities protect you from market volatility as they are guaranteed, and some plans protect the principal amount. Discuss your options with your advisor.
- How do I know that these options are safe?
- Insurance companies are rated on their financial strength by financial rating agencies, and you should discuss these ratings with your advisor.
Strategies Other Than Annuities For Monthly Income
It could be very helpful to speak with your advisor about different strategies to protect yourself from a volatile market and rising healthcare costs other than annuities as well. An annuity or other strategy can protect you from volatility in investment markets and make your retirement budgeting much easier.
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