Planning for Health Care Costs

Planning a Retirement Drawdown Strategy?

Nowadays, with people living longer, health-care costs rising, pensions disappearing and people increasingly embracing more active post-career lives, retirees need to be deliberate about making their money last. Here are some things to consider when creating a customized “drawdown” strategy.

Most experts suggest finding guaranteed monthly income sources to cover your basic expenses such as mortgage or rent payments, utilities, food, healthcare premiums and the like. Some of that may come in the form of a corporate pension or your Social Security benefits. But if these sources of income are not enough to cover your basic expenses, you may consider purchasing a lifetime income annuity to help fill the gap.

You have a number of options to consider for the assets in a former employer’s retirement plan account. You can take a lump-sum cash distribution, leave the money in the plan, move it to your new employer’s retirement plan, roll over all or part into a traditional IRA or convert all or part to a Roth IRA.

Each choice may offer different investment options and services, fees and expenses, withdrawal options, required minimum distributions, tax treatment, and provide different protection from creditors and legal judgments. These are complex choices and should be considered with care.

If you begin taking social security benefits at 62 you lock in a permanent discount of about 25% on your monthly checks. If, on the other hand, you can wait until age 70, you may get nearly a third more than if you had started at full retirement age—and about 75% more than if you opted to begin benefits at 62.

Retirees today have to view themselves as long-term investors and need to grow their income to stay ahead of inflation. That could mean keeping part of your portfolio in stocks, which over the long term have outperformed bonds and other fixed-income investments, keeping in mind that past performance is not a guarantee of future results.

 In the end, how you draw down your assets can help you determine whether or not you outlive them. Finding good answers to these and other questions now is a crucial part of retirement planning.

For more information, contact The Menashe Morley Group in the Rancho Santa Fe office at 858-381-8113. The Menashe Morley Group, serving the community for over 30 years:  David Menashe is a Senior Vice President and Wealth Management Advisor, Bruce Morley CRPC is a First Vice President and Wealth Management Advisor and John Naviaux is a Vice President and Wealth Management Advisor for Merrill Lynch, Pierce, Fenner & Smith Incorporated.

For more information, contact The Menashe Morley Group in the Rancho Santa Fe office at 858-381-8113. The Menashe Morley Group, serving the community for over 30 years:  David Menashe is a Senior Vice President and Wealth Management Advisor, and Bruce Morley is a First Vice President and Wealth Management Advisor and John Naviaux is an Assistant Vice President and Financial Advisor for Merrill Lynch, Pierce, Fenner & Smith Incorporated.

All annuity contract guarantees and payout rates are backed by the claims-paying ability of the issuing insurance company. They are not backed by Merrill Lynch or its affiliates, nor do Merrill Lynch or its affiliates make any representations or guarantees regarding the claims-paying ability of the issuing insurance company. Annuities are long-term investments designed to help meet retirement needs. An annuity is a contractual agreement where a client makes payments to an insurance company, which, in turn, agrees to pay out an income stream or a lump sum amount at a later date. Early withdrawals may be subject to surrender charges, and taxed as ordinary income, and in addition, if taken prior to age 59 1/2 an additional 10% federal income tax may apply.
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Planning for Health Care Costs

Mennashe Morley Group