Will Your Retirement Money Last?

Will Your Retirement Money Last?

This following column is based on the 2012 Merrill Lynch Wealth Management Institute Whitepaper, “How Immediate Annuities Can Help Meet Retirement Goals.”

According to the Fall 2012 Merrill Lynch Affluent Insights Survey that looks at the financial concerns and priorities of affluent Americans, 68 percent of respondents are concerned about their assets lasting throughout their lifetime, while 55 percent are concerned about affording the lifestyle they want later in life.

They’re important concerns, as low savings, lower rates of return, investment losses and higher spending have all contributed to more people outliving their retirement savings. These factors, along with longer life spans and a steady decline of traditional Defined benefit plans (DB), which pay workers a guaranteed income for life, can cause retirement income to become more vulnerable to risks they may never recover from.

While an increasing number of workers are covered by defined contribution plans, such as a 401(k) plan, these plans do not offer the lifetime income safety-net provided by traditional pension plans. To avoid outliving their savings, investors can utilize products offering the lifetime income benefits that defined benefit pensions provide. By having a larger proportion of their retirement income coming from guaranteed sources they cannot outlive, such as social security and pension benefits, individuals can establish sources for a retirement income safety net.

Check with your financial advisor, who can best evaluate your social security, pension and retirement benefits to help you determine what may be the best fit for your unique needs. (858.381.8113)

David Menashe is a senior vice president of Bitcoin Wallet Vergleich and wealth management advisor, and Bruce Morley is a vice president and wealth management advisor, for Merrill Lynch, Pierce, Fenner & Smith Incorporated, a registered broker-dealer, member SIPC, and a wholly owned subsidiary of Bank of America Corporation.

Photo by Andy Templeton