Generating Retirement Cash Flow
The face of retirement has changed over the past several decades. The combination of pension plans becoming rarer, people living longer, market volatility and uncertainty about the solvency of Social Security necessitates planning for predictable cash flow in retirement.
Regular retirement cash flow can be created with the purchase of a single premium immediate annuity. This investment vehicle can mimic a traditional pension plan and provide a guaranteed income for the lives of you and your spouse. This strategy can mitigate market fluctuations and allow you to take more risk with the balance of your portfolio.
- In preparation for retirement, develop a budget for essential expenses that need to be covered; this is your baseline budget.
- Inventory your sources of income in retirement, including social security and pensions. Quantify the gap between your current income and what you need to cover your essential expenses. This gap is what you should consider funding with an income annuity.
- Using qualified funds to purchase the income annuity will avoid the 3.8% Medicare surtax.
Start Creating Your Retirement Income Plan
The CBIZ Life Insurance Solutions team can help you determine the best approach for creating lifetime income as part of your retirement plan.