Plan For Tomorrow | Planning for your income in retirement
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Planning for your income in retirement

Monday 9 August 2021 | Reading Time: 4 minutes

As you approach retirement, do you have an income plan ready to help ensure you have the money needed to enjoy all the activities you have planned. Here are some suggestions you may find helpful.

Make retirement income planning a priority

When transitioning from work to retirement, many people choose to rely upon their investments, Social Security, and any pensions they might have. But retirement has changed quite a bit in recent decades. People are living longer, costs are rising, pensions are becoming increasingly rare, and there are ongoing questions about the long-term financial health of Social Security. It can be a challenge to secure a dependable and consistent retirement. Have you considered “self-funded” retirement options? Even if you have built a diversified retirement plan that includes savings and investments, that money can be affected by market fluctuations.

Analyze your financial status

To financially plan for retirement income, how much money will you be spending once you leave the workforce? Having realistic expectations about your retirement costs, spending habits, and income can help you navigate your financial life in retirement.

  • How long will your savings last? You may outlive your savings, so factor in that possibility so the well doesn’t run dry.
  • What is your expected income during retirement? This may include Social Security, pensions, annuities, money from a part-time job, or income from a rental property you may own.
  • What are your estimated costs for your planned retirement activities such as any debts, unexpected expenses, and medical costs?
  • Review your investment portfolio and retirement accounts. When you retire, you will be making a switch from saving to spending. Will assets have some growth potential due to inflation? You may also consider minimizing investment risk to better protect your portfolio.

Consider a fixed index annuity

One type of financial product that can help you secure retirement income is a fixed index annuity (FIA). An FIA is an insurance contract that provides you with income payments in retirement. It is designed for long-term goals like retirement because your interest payments are based on the performance of a stock market index. However, unlike owning stocks, FIAs offer protection against market loss and downturns and are not a direct investment in the stock market.1 Along with this premium protection, FIAs offer the opportunity for growth and may help guarantee you a stream of income payments for as long as you live.

Talk to a financial professional about retirement

Talking with a financial professional about finances is something many people only consider when they are having financial difficulties. However, it’s a good idea to be proactive and make sure you are on the right track. Financial professionals can help you be more financially prepared, and ensure you have a retirement “paycheck.” They can offer you options for achieving guaranteed lifetime income. To learn more about fixed index annuities and which one may be right for you in your financial plan for retirement, contact your financial professional today.

1 Fixed index annuities are not a direct investment in the stock market. They are long term insurance products with guarantees backed by the issuing company. They provide the potential for interest to be credited based in part on the performance of specific indices, without the risk of loss of premium due to market downturns or fluctuation.

Although fixed index annuities guarantee no loss of premium due to market downturns, deductions from your accumulation value for additional optional benefit riders or strategy fees associated with allocations to enhanced crediting methods could exceed interest credited to the accumulation value, which would result in loss of premium. They may not be appropriate for all clients. Interest credits to a fixed index annuity will not mirror the actual performance of the relevant index.

This information is provided for general reference purposes and should not be viewed as investment advice or as a recommendation for a specific allocation. Neither North American, nor any agents acting on its behalf should be viewed as providing legal, tax or investment advice. Always consult with and rely on a qualified advisor.

“Income” or “lifetime income” refers to guaranteed payment of lifetime payment amounts (“LPAs”). It does not refer to interest credited to the contract. You should consult your own tax advisor regarding tax treatment of LPAs, which will vary according to individual circumstances.

The term financial professional is not intended to imply engagement in an advisory business in which compensation is not related to sales. Financial professionals that are insurance licensed will be paid a commission on the sale of an insurance product.


REV 6/2022