How To Never Run Out of Money In Retirement

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Almost half of Americans say running out of money is their biggest retirement worry, a recent report finds. Pamela Yellen, financial security expert and New York Times best-selling author, suggests ways to ensure you make your money last as long as you do.

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The Fear Running Out Of Money In Retirement

Americans fear running out of money in retirement more than declining health. That worry is justified, as longevity is the greatest threat to a secure retirement, says Pamela, who has investigated more than 450 financial products and strategies. The reason so many people are in danger of outliving their savings? Most rely on 401(k)s and IRAs that are unpredictable and not guaranteed.

“Over the last 40 years, there has been a dramatic shift away from company pension plans that promised workers a certain amount of money every month in retirement for as long as they lived,” Pamela says. “Instead, there’s been a seismic shift toward do-it-yourself, cross-your-fingers, hope-and-pray retirement planning strategies like 401(k)s and IRAs.”

Because you don’t know how long you’ll live or how much you can safely withdraw each year, you run the risk of spending too much too quickly and outliving your savings, or spending too conservatively and not being able to fully enjoy your retirement years.

“Traditional retirement investing strategies also make it virtually impossible to ensure a major market crash doesn’t cut the value of your savings in half when you might not have time to recover from it,” Pamela says.

The Center for Retirement Research at Boston College and other experts recommend a specific financial vehicle to ensure your money lasts as long as you do. That financial vehicle is called an annuity. But there are many different types of annuities and many features available. How do you know which is right for your unique situation?

Pamela also explains:

  • The best type of annuity if your goal is having safe, predictable growth.
  • The best type of annuity if you want the greatest growth potential and the peace of mind of never losing money.
  • The annuity type designed to provide you with guaranteed income, no matter how long you live.
  • How to move money from a 401(k) or IRA into an annuity — without owing taxes.
  • Why annuities can make sense for people between the ages of 45 and 80, and the annuity type that folks up to age 90 or 95 can benefit from.

“Including the right kind of annuity in your financial plan takes the guesswork out of taking income in retirement and can free you from the fear and worry that most people live with today,” Pamela says.

About the Author:

Pamela Yellen is founder of Bank On Yourself, a financial investigator and the author of two New York Times best-selling books. Readers can get a free copy of her latest book, "Rescue Your Retirement: Five Wealth-Killing Traps of 401(k)s, IRAs and Roth Plans — and How to Avoid Them" here for a limited time.