The new reality of retirement

In the past, individuals entering retirement could reasonably rely on a number of potential sources for the steady income needed to maintain a decent standard of living in the golden years. Company pensions, a well-funded Social Security program and personal savings, including home equity were the foundations of most retirement plans. Today, the landscape has changed drastically.

A New Reality

Fewer employer pensions: Over the past several decades, many employers have changed from the defined benefit contribution plans. A survey by the Bureau of Labor Statistics, published in 2013, found that only 26% of civilian workers in the U.S. participated in a defined benefit plans.

Social Security is a “pay-as-you-go” system, with current workers supporting those already receiving benefits. As the baby boomers start to retire, the number of individuals remaining in the workforce to support them grows smaller. Although politically unpleasant, fiscal reality may force payroll taxes, reductions in benefits, or both. Many are starting to question if Social Security will even be around after 2033.

We’re living longer: A child born in 1900 had an average life expectancy of 47.3 years. For a child born in 2011 however, average life expectancy had increased to 78.7 years, according to the National Center for Health Statistics. Extended life spans mean that the money has to last longer, although exactly how long is unknown.

Think Differently

Now, individuals must rely on a very different thought process and not count too heavily on employer pensions and Social Security. Today’s future retiree must accept a higher degree of personal responsibility for both accumulating and managing the assets needed to pay for retirement. And managing these assets occurs in a world where constant inflation, fluctuating interest rates and unpredictable financial markets are a fact of life.

A Reliable Retirement Income

Life insurance is designed to help solve the problems created when someone dies prematurely. An annuity, on the other hand, is designed to protect against the possibility of living too long and is something to consider when working to secure a reliable income stream for retirement. There are a few types of annuities to consider when this is an objective.

An “immediate” annuity is a contract between an individual and an insurance company. In exchange for a single, lump-sum premium, the insurance company agrees to begin paying a regular income to the purchaser for a period of years or for life. The payments depend on a number factors:

Premium paid: Generally the larger the payment, the larger the income stream.

Age: Older individuals typically receive larger periodic payments.

Payout period selected: A shorter payout period usually results in a larger payment.

Underlying investment: Generally, either a fixed or a variable annuity.

A fixed annuity pays a fixed rate of return. The insurance company invests in a portfolio of debt securities such a mortgages or bonds and pays out a fixed rate of return. Generally, this rate of return is guaranteed for a certain period of time after which a new rate is calculated. Most insurance companies offer a guaranteed minimum rate throughout the life of the contract. Such guarantees are based upon the claims-paying ability of the issuing insurance company.

A variable annuity offers the potential for higher returns in exchange for assuming a higher level of risk. You can choose from among several types of investment portfolios, such as stocks or bonds. The amount of each annuity payment will fluctuate depending on the performance of the underlying investments. Variable annuities are long-term investments designed for retirement purposes. They have certain limitations, exclusions, charges, termination provisions, and terms for keeping them in force are sold by prospectus only.

The FDIC or any government agency does not insure annuities. Since an annuity may be payable far into the future, dealing with a financially solid insurer is essential. Credit rating companies such as A.M. Best, Standard and Poor’s or Moody’s can provide an objective measure of a firm’s financial stability. For many individuals, an immediate annuity can form an important part of their retirement income planning. Because an immediate annuity is a complex product, the advice and guidance of a trained professional is highly recommended.

While retirement planning has changed over the past decades, with some knowledge and guidance a comfortable retirement can be secured. One thing is certain, the sooner you start saving the better off you will be in the future.

This information is for educational purposes and should not be considered specific financial, tax or legal advice. Always consult with a qualified advisor regarding your individual circumstances. Investment Advisory Services offered through Global Financial Private Capital, LLC, an SEC Registered Investment Adviser.

Brad Zucker, RFC® is the president of Safe Money Advisors, Inc., a Las Vegas-based independent financial advisory firm. He blogs on personal finance every Monday for the RJ. For more information visit www.SafeMoneyAdvisorsNV.com or connect with him viaFacebook and LinkedIn.

ad-high_impact_4
Business
Primm’s outlet mall has fallen on hard times
The mall, attached to Primm Valley Resort, opened in 1998. Back then, it was a “textbook, perfect outlet-center location." But now, Primm’s outlet mall has fallen on hard times. Las Vegas Boulevard has endless shopping spots. And there are other outlet malls that don’t require a hefty drive to the state line. Its mortgage-holder foreclosed on the mall in late September.
Las Vegas residents discuss avoiding holiday scams
Las Vegas residents discuss their donation habits and how they avoid giving money to scam charities during the holiday season. (Bailey Schulz/Las Vegas Review-Journal)
Tesla’s Nevada Gigafactory ahead of economic impact expectations
The Tesla Gigafactory’s economic impact on Nevada has exceeded projections, bringing in more than 7,000 jobs. In 2014, Nevada agreed to give the automotive and energy company $1.3 billion in tax abatements. In return, Tesla promised to meet certain requirements in areas like employment and capital investment. As of June, Tesla has brought in a total of $6.05 billion in capital investment, surpassing the $4.95 billion projection. The original contract gave the company until 2024 to make $3.5 billion in capital investments in Nevada. Derek Armstrong, deputy director of the Governor’s Office of Economic Development.
Land sales near the Las Vegas Raiders stadium
Land around the Las Vegas stadium site has been selling for high prices. A few months before the stadium’s groundbreaking, Global Trust Group acquired a 2.5-acre parcel just north of the stadium site. The property sold for $7.25 million, or $2.9 million an acre. Osprey Real Estate Capital and Huntington Hotel Group acquired a 2-acre industrial site just west of the stadium site in late November. The property sold for $6.5 million, or $3.15 million per acre. That's roughly 12 times the average price of land in the valley this year as tracked by Colliers International.
T-Mobile Tech Experience Truck parks in Toshiba Plaza at T-Mobile Arena
The Tech Experience Truck is a state-of-the-art showroom on wheels, with demonstrations that put connected drones, smart cities, augmented/virtual reality and smart tracking. The exhibit shows new wireless technology – including 5G and the Internet of Things (IoT). (K.M. Cannon/Las Vegas Review-Journal)
Steve Siegel, CEO of the Siegel Group, speaks about helping families and other needy residents
Steve Siegel, CEO of the Siegel Group, speaks about helping families and other needy residents to keep them from teetering off into homelessness. Bizuayehu Tesfaye/Las Vrgas Review-Journal @bizutesfaye
Crowds camp out for Chick-fil-A opening
Dozens of customers camped out 24 hours ahead of the 6 a.m. Thursday opening of the new Chick-fil-A on Rainbow Blvd.
Cheapest listings for sale in Las Vegas
Listed for $39,990, 585 S. Royal Crest Circle, Unit #9 is one of the cheapest homes currently listed for sale in Las Vegas. (Caroline Brehman/Las Vegas Review-Journal)
MGM's sports betting deals
MGM Resorts International signed a sports betting sponsorship agreement with the NBA in July It was the first professional sports league to have official ties with a legal sports betting house. The deal came just two months after the U.S. Supreme Court overturned a law prohibiting sports betting in most states. In October, MGM became the first gaming company to sign a sports betting partnership with the NHL. In November, MGM became the first gaming company to sign a sports betting partnership with the MLB. Financial terms of Tuesday’s deal and earlier partnerships have not been announced.
Terry Miller discusses Convention Center
Project Manager Terry Miller explains the phases of Convention Center construction.
Zappos treats their team members on Cyber Monday
Zappos rolls out a variety of food, drinks and special activities for all team members at their downtown Las Vegas headquarters for Cyber Monday. (K.M. Cannon/Las Vegas Review-Journal)
Team Hybrid at the 2019-Model Motor Trend International Auto Show
Among the companies showing off the 2019 model cars, Team Hybrid shows off its modified cars. Las Vegas resident David David talks about the team, which is in its ninth year exhibiting at the show, and his show car.
Black Friday Shoppers at downtown Summerlin and at the Arsenal
Black Friday shoppers at downtown Summerlin and at the Arsenal. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfYe
Black Friday shopping in Las Vegas
Black Friday sale shopers express their shopping experience. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Las Vegas Livestock recycling Strip food waste
Las Vegas Livestock collects and recycles food from many Las Vegas Strip companies. (Nicole Raz/Las Vegas Review-Journal)
Black Friday at Fry's
Shoppers line up for deals early on Black Friday at Fry's Electronics on Las Vegas Boulevard South. (Mat Luschek/Las Vegas Review-Journal)
Black Friday shoppers at Best Buy at 5 am
Black Friday shoppers at Best Buy at 5 am on Nov. 23. (Mat Luschek/Las Vegas Review-Journal
Black Friday - 1am Closing Time
Quiet night.
Black Friday - 12:30am - Best Buy Arroyo Crossing
Sam's Town Holiday Lighting Ceremony
On Wednesday, Nov. 21, 2018, Mystic Falls Park opened with its annual tree lighting ceremony, hosted by Boyd Gaming Executive Chairman Bill Boyd. The attraction features a Winter Wonderland theme and holiday-inspired laser light show, available daily Nov. 23 to Jan. 1. (Mat Luschek/Las Vegas Review-Journal)
What Is A Smart City?
George Karayannis, vice president of CityNow, Panasonic’s smart-city arm, explains. (Nicole Raz/Las Vegas Review-Journal)
Walmart uses virtual reality to train employees
Walmart Academy Facilitator demonstrates the VR training program being used by Walmart stores across the country.
With holidays around the corner, department stores hiring extra staff
J.C. Penny hired 72 seasonal workers this year at the Galleria at Sunset mall in Henderson in order to handle the heavy traffic of the holiday shopping season. (Rachel Aston/Las Vegas Review-Journal)
Startup Weekend fosters new businesses
With the help of entrepreneurial peers and an expert panel of mentors, Techstars Startup Weekend fosters the ideas of attendees into marketable business plans. (Rachel Aston/Las Vegas Review-Journal)
Mecum Car Auction in Las Vegas
The Mecum Auctions is held at the Las Vegas Convention Center. Bizuayehu Tesfaye/ Las Vegas Review-Journal @bizutesfaye
Construction underway for new Google Data Center
Henderson is slated to be home to a new Google data center in December 2020. The Governor’s Office of Economic Development approved $25.2 million in tax abatements for Design LLC, a wholly-owned subsidiary of Google. The company plans to build the data center on 64 acres of land on Warm Springs Road west of Boulder Highway.
Anthony Rufo talks about his new product, an in-home digital companion and monitor.
Anthony Rufo talks about his new product, HAPPIE Home technology, an in-home digital companion and monitor designed for unpaid family caregivers that gives personalized alerts, messages and reminders. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Holiday parades help bring shoppers to Downtown Summerlin
Sports Town USA floor manager Angela Gardonio talks about the work that goes into the Downtown Summerlin holiday parades and how they benefit her and other businesses there.
Final vote on CG Technology
Final commission vote on the $2 million settlement for CG Technology.
Happie Home Startup Establishing Headquarters In Las Vegas
Digital companion startup company Happie Home is establishing its headquarters in Las Vegas after receiving tax abatements from the Governor's Office of Economic Development on Nov. 15. (Bailey Schulz/Las Vegas Review-Journal)
TOP NEWS
News Headlines
ad-infeed_1
ads_infeed_2
Local Spotlight
Add Event
Home Front Page Footer Listing
Circular
You May Like

You May Like