No matter where you are in your journey toward retirement, it never hurts to step back and take stock of the progress you're making toward your long-term financial goals. As part of your retirement plan, you'll need to decide when to begin saving and investing your money, when and how to take that money when the time comes, and perhaps how to create a legacy for loved ones. Experts project that traditional sources of retirement income, such as employer pensions and Social Security benefits, will provide only a portion of the total income you may need to fund your retirement.
Underestimating the amount of time you'll spend in retirement and how much it will cost are considerations that are often overlooked. The average life expectancy has increased significantly over the past century, which means it's critical to evaluate your financial strategy — because, happily, you may spend more time in retirement than planned.
What is an Annuity? An annuity is a long-term, tax-deferred vehicle designed for retirement. Variable annuities involve investment risks and may lose value. Earnings are taxable as ordinary income when distributed and may be subject to a 10% additional tax if withdrawn before age 59½.
Saving For Retirement
Retirement may be years away or it may be decades away. Whether near or far, the earlier you begin to save, the better chance you'll have of building a nest egg sufficient to sustain the retirement lifestyle you envision.
Your plan for generating income in retirement will depend on your individual goals. Whether it's maintaining your current lifestyle or taking on larger expenses like traveling — turning those goals into realities will require a strategy.
Once you've reached retirement, you may want to consider the legacy you'll leave for loved ones. With careful forethought, you can take control of how an inheritance will pass on with the fewest obstacles (and least amount of taxes) possible.