It is somehow a strange feeling not to receive a paycheck for the first time. New retirees may consider it a big adjustment. It seems like they are worrying a lot on how to safeguard their money and cannot enjoy retirement without spending it all.
Well, there is nothing to worry about, the financial services industry has created a lot of insurance type products against long-term risks and came up with a systematic withdrawal program. These products are designed to ease your mind and will let you sleep at night. You could buy an immediate fixed annuity which provides a guaranteed stream of income for the rest of your life or a set period of time.
You can also choose Fixed Indexed Annuities which offer a guaranteed minimum rate of return. It enables the owner to enjoy interest growth tied to stock market performance without losing the principle because of stock market downturns.
Another option is a deferred-income annuity, often referred to as longevity insurance. You give a lump-sum payment to the insurance company in exchange for guaranteed lifetime income that begins at a future date, up to forty years later in some cases.
And long-term-care insurance is still an option. LTCI policies aren’t standardized in the same way that health insurance policies are, so you will need to compare the coverage, benefits, and premiums of any policies. You’ll unlikely find an LTCI provider who guarantees level premiums, you’ll need to plan for price increases. Typically, however, once you start receiving benefits, you no longer have to pay the premium.
The point is whatever approach you are choosing, make sure you are comfortable and enjoying while you can. Whether it means treating yourself, your spouse or your whole family. Retirees who have a guaranteed stream of income actually have happier retirements.