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Income solutions in retirement

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Posted: August 19, 2008 8:34 p.m.
Updated: October 21, 2008 5:02 a.m.

Retirement should be a reward for a life of planning, sacrificing and saving.

It should be a time to start a fulfilling new career, explore volunteer services, build a new home and travel to new places.

It means getting involved with all those activities that there was never time for before you retired.

But every reward seems to come with a challenge. Inflation, market volatility and ever-increasing taxes can erode purchasing power. And continuing good health could mean that you will outlive your income, resulting in a less than ideal retirement.

You should be looking to your financial advisor to help you plan for a secure, comfortable retirement. Some variable annuities offer features and benefits that can provide guarantees to help you ensure a steady income to last throughout retirement and your lifetime.

What challenges your dreams?

Your question in retirement should be which dreams to pursue, not how. Your advisor can help you manage your income throughout retirement and help you find strategies and solutions to address each challenge. What are the primary issues you will face?

n Inflation. The impact of inflation on your retirement income can be staggering, and skyrocketing medical costs are one example.

n Market volatility. When the technology bubble burst in 2000, many retirees who were counting on the stock market for income felt a significant hit.

Because of market volatility, they lost expected income, confidence in the future, and control over their remaining years. Volatility is one reason why portfolio diversification and professional management are critical for your income.

n Longevity. Underestimating longevity can lead to serious financial difficulties.

It wasn’t too long ago that retirees could live well on 70 to 80 percent of their pre-retirement income. Now, with a high probability of living 20 to 30 years or more into retirement, combined with an active lifestyle and increasing costs, you will need about 100 percent of your pre-retirement income to live.

n Control. Even with the blessing of a long and healthy life, protection from unforeseen problems, such as an unexpected illness, a family crisis, or creeping inflation, without the right retirement plan, could result in the loss of control of your lifestyle for the rest of your life.

How a variable annuity can help

A variable annuity is a long-term investment vehicle specifically designed for retirement savings. It can help you build, protect and enjoy wealth through income or transfer to your heirs. It can provide a unique combination of:

n Experienced investment management.

n Optional features and benefits that many provide guaranteed lifetime income.

n The ability to meet changing needs.

Retirement is not an end but an opportunity for new beginnings.

Your financial advisor can help you begin to redefine your retirement by providing the right tools for the job.

A variable annuity may be the tool you need to help build a secure future.

Jim Lentini, CLU, ChFC, IAR is president of Lentini Insurance & Investment, located in Santa Clarita. His column represents his own views and not necessarily those of The Signal.


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