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Today, more than 60 percent of married households with children have two income earners (2). Yet many still struggle to make ends meet. That makes it difficult to save for both the exponentially rising cost of college and retirement. With fewer children in subsequent generations to contribute to the economy and bolster Social Security and Medicare programs, there may be fewer resources available to support the number of older adults in the future. (3)
It’s worth remembering that 2019 began with the longest U.S. government shutdown in history.(4) On top of that challenging start to the year, some economists and media pundits have been suggesting we may be headed for a recession in the future.(5)
One strategy for retirement income planning during uncertain times is to create multiple income streams. For example, you could purchase an annuity contract for an insurer-guaranteed stream of lifetime income. In one recent report, several Brookings Institution fellows noted, “For many people, acquiring an appropriately consumer protective and reasonably priced income annuity with at least a portion of their savings will still be the best choice for retirement income, and for many others it will play a key role in a broader post-retirement financial strategy.” (6)
Content prepared by Kara Stefan Communications.
Sources:
(2) U.S. Bureau of Labor Statistics. April 27, 2017. “Employment in families with children in 2016.” https://www.bls.gov/opub/ted/2017/mobile/employment-in-families-with-children-in-2016.htm. Accessed Oct. 18, 2019.
(3) Kathleen Romig, Matt Broaddus and Aviva Aron-Dine. Center on Budget and Policy Priorities. April 22, 2019. “Financial Challenges Facing Social Security and Medicare Largely Unchanged From Last Year, Except for Improvement in Disability Insurance.” https://www.cbpp.org/research/social-security/financial-challenges-facing-social-security-and-medicare-largely-unchanged. Accessed Oct. 31, 2019.
(5) Reade Pickert, Yue Qiu and Alexander McIntyre. Bloomberg. Nov. 6, 2019. “U.S. Recession Chances Inch Down to 26% Within Next 12 Months.” https://www.bloomberg.com/graphics/us-economic-recession-tracker/. Accessed Nov. 7, 2019.
(6) David John, William Gale, J. Mark Iwry and Aaron Krupkin. Brookings Institution. July 2019. “From saving to spending: A proposal to convert retirement account balances into automatic and flexible income.” https://www.brookings.edu/wp-content/uploads/2019/07/ES_201907_JohnGaleIwryKrupkin.pdf. Accessed Oct. 18, 2019.
Guarantees and protections provided by annuities are backed by the financial strength and claims-paying ability of the issuing insurer.
We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.
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