When you’re building up your retirement savings, some options seem more glamorous than others. After all, who doesn’t daydream about making that life-changing investment at the ground level? For some people, maxing out their 401(k) contributions every year earns bragging rights among friends. But you might be overlooking one of the most powerful ways to ensure you don’t run out of retirement income — annuities. For You: Here’s How Much You Need To Retire With a $100K Lifestyle Learn About: How To Get Guara ...

The average number of years spent in retirement continues to grow, but many boomers aren’t planning to spend several decades retired. According to the TIAA Institute’s “Retired for How Long?” report, most boomers (57%) plan to retire between ages 60 and 69 and nearly half (46%) believe they will live to age 90 or older. That means a significant portion of boomers will spend 30-plus years in retirement. Yet, only 9% are planning to spend that long in retirement. Be Aware: The Most Common Retirement Mistake, ...

Core Insights - Retirement planning is essential not only for ensuring sufficient funds for leisure activities but also for mitigating financial risks post-retirement [1][2] Group 1: Financial Risks in Retirement - Longevity risk is a significant concern, as retirees may outlive their savings due to various factors [4] - Sequence-of-returns risk can severely impact retirement savings if a market downturn occurs early in retirement [5] - Inflation, rising healthcare costs, and the IRMAA surcharge can further strain financial resources, with human behavior also posing risks through panic selling or chasing trends [5] Group 2: Strategies for Retirement Planning - A recommended approach is to engineer cash flow first and optimize returns second, ensuring a stable income that retirees cannot outlive [6] - Maintaining 12 to 24 months of essential expenses in cash can prevent forced selling during market dips [6] - Focusing on steady income allows retirees to balance safety and growth, enabling them to pursue higher-risk investments when their cash flow is secure [6][7]

Group 1 - The concept of a 100-year life plan is gaining traction as advancements in healthcare make living to 100 more feasible, highlighting the importance of financial planning for longevity [1][2] - Financial well-being is a central focus of the 100-year life plan, emphasizing the need for a longevity portfolio that ensures financial resilience and flexibility [2][4] - Longevity risk, the risk of outliving savings, is becoming a significant concern for many individuals, particularly in states like Florida and Texas, where clients are advised to consider guaranteed income sources [4][5] Group 2 - A 65-year-old today has a one-in-three chance of living past 90 and a one-in-seven chance of surpassing 95, indicating that longevity risk is a statistical certainty for many [5] - Without guaranteed income sources, retirement portfolios may face longevity drag, leading to the gradual depletion of assets over an extended lifespan [5][6] - Certain annuities, such as single-premium immediate annuities (SPIAs) and deferred income annuities (DIAs), can provide steady income and protect against market volatility, making them valuable components of a longevity portfolio [6][7]

Core Insights - Retirement for many Americans is about achieving a comfortable middle-class lifestyle, with a target passive income of $12,000 per month or $144,000 per year to cover expenses and enjoy luxuries [1] - Achieving this level of retirement income requires not only a substantial nest egg but also resilience against inflation, market fluctuations, and longevity risk [2] Financial Requirements - The "magic number" for retirement savings in 2025 is projected to be $1.26 million, which translates to an annual retirement income of approximately $50,400 or $4,200 per month, closely aligning with the median retirement income of $54,710 for Americans over 65 [3] - To achieve a retirement income of $12,000 per month, an individual would need around $3.6 million in retirement savings, which is nearly three times the average retiree's income [4] Inflation and Longevity Risk - Even a modest inflation rate of 2% can significantly erode purchasing power over time, necessitating an increase in retirement income to about $214,000 per year by age 82 to maintain the same standard of living as $144,000 in the first year of retirement [5] - Investment strategies play a crucial role in managing inflation and longevity risk; relying on low-risk assets like bonds may require savings well over $3.6 million to keep pace with inflation [6]