Will Your Nest-Egg Last through Retirement?

Insurance is a financial tool that offers you protection and cover, helping you in the event of an unexpected event cutting off your money supply, or helping your family meet expenses in case something happens to you.

Have you ever considered applying the same idea to your retirement money? What happens if the figure you’ve collected over the years is not enough to cover everything you need after you retire?

Insurance can be a great supplement to your retirement fund, helping you ensure that your savings last through your retirement years. Let’s look at how this works.

The Future is Unpredictable

The future is uncertain and it becomes more so as you near retirement. Here are some of these unpredictable events that can weaken what seems like a solid retirement plan:

• Life Span – Suppose you believe that you will live for about fifteen years after retirement. Your retirement investment can sustain that. However, what if you end up living longer than fifteen years? Living a long life is increasingly possible due to advances in health care, but without money, it can be a living hell.
• Market Fluctuations – If your retirement plan is based upon stock market performance, then it’s only as good as the stocks in which you’ve invested. Companies – large and small alike – can go down at any point. If that happens, you could be left with significantly less funds or even no money at all!
• Inflation – This is the increase in cost of living from year to year, which keeps rising every day. If the growth of inflation outstrips the rate at which your retirement money is growing, you could be in big trouble when you retire from work.
• Mistakes – As you age, your mind becomes less sharp and capable of making the right decisions, which is a huge risk when it comes to the management of money. There is always the chance that you might make a bad investment that ends up ruining your retirement savings completely!
• Temptation – When you’re young, you are more tempted buy new stuff and spend frivolously. What if, in a moment of weakness, you end up spending money that was supposed to be saved for your retirement fund? You will have reduced savings, which is why a well-planned retirement strategy is essential.

As you can see now, there are endless factors that affect your retirement fund. In other words, your nest egg simply may not last through retirement. This is worrisome, but there is a solution!

Insuring Your Retirement

The most effective solution to the above problem is to insure your retirement. To put it simply, you need to make sure that you insure your funds against anything that can affect them, which will help you ensure:

• Income as long as you are alive.
• Protection from stock market fluctuations.
• Financial growth that keeps pace with inflation, if not outpacing it.
• No effort on your part while collecting benefits.

There are three sources of retirement income that meet all the above conditions for a happy and financially secure retired life:

1. Social Security Income – This is guaranteed by the government. To make the most of it, don’t start availing benefits till you are 70.
2. Employer Pension – If your employer offers pension, just take it. This will ensure you get a monthly income lasting your lifetime.
3. Annuities – These financial products pay you a fixed amount on a periodic basis for life, unaffected by market fluctuations.

Retirements funds need to be insured for your future financial security, and using any of the above methods will allow you to do just that. Of all the above options, the best is to buy an annuity from an insurance company, especially if you can get a policy that also offers death benefits for your family in case you die prematurely.

Make sure you pick a company that is reliable, in order to enjoy an additional source of guaranteed income, no matter how long you live!