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Jim Lentini: Retirement and Social Security preparations

Business Commentary

Posted: February 8, 2011 1:55 a.m.
Updated: February 8, 2011 1:55 a.m.

Today, Americans, and specifically Californians, are being inundated with information from Washington and Sacramento of who, what or how to solve the problem of deficits in our state and nation.

In addition, we are getting news on Medicare and Social Security about how and when these programs will run out of money.

An Associated Press article in late January reported congressional budget experts now say that the trust fund for Social Security will run at a deficit this year, and keep running in the red until its funds are drained by about 2037.

This problem is escalating as baby boomers are starting to retire, and many older, unemployed Americans are applying for benefits early.

The article further states that, for much of the past 30 years, the program has run big surpluses, which the government has borrowed from to spend on other programs. Now that Social Security is running deficits, the federal government will have to find money elsewhere to help pay for benefits.

What does this mean to you and me? It means government programs as we know them today, and which we have contributed to for most of our adult and working lives, are uncertain and working Americans need to focus on their personal planning for the future.

Also, many traditional employer-offered pension plans have been disappearing, leaving workers uncertain about what kind of retirement they will have available to them in the future.

If you are in the critical years just before or after beginning retirement, these issues can be very problematic.

People are living longer, which is good news on one hand, but also a concern as retirees may need a steady stream of income to last 30 years or more.

Taxes, health care, inflation and other rising costs can significantly affect your lifestyle in retirement. And the recent financial crisis that hit the markets in 2008 can have a devastating impact on the portfolios of retirees and those close to retirement.

To address these problems, retirees and workers planning for their future retirement need a way to help guarantee some portion of their retirement income while also helping protect it against market volatility.

One means to guarantee some portion of retirement income can be achieved with variable annuities that have a guarantee withdrawal benefit rider. The benefit helps to provide you with increased income by capturing upsides of the market and protecting against market downturns. It’s this combination of guaranteed growth and income protection that makes the benefit such a good choice for retirement assets.

I have found this solution most beneficial for some portion of retirement assets, as no other investment has proven to provide future guarantees of principal, growth and lifetime income provided for a retiree and spouse.

Based on the latest financial issues we are faced with, it is imperative to discuss these options with your financial adviser.

The best quote, which I use quite often, is what Will Rogers made famous after the last Great Depression of 1929, “I’m not so concerned with the return on my money, as I am with the return of my money.”

Jim Lentini, CLU, ChFC, IAR is President of Lentini Insurance & Investments Inc. He can be reached at (661) 254-7633.His column reflects his own views and not necessarily those of The Signal.


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