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Outliving Income - 25%

Maintaining Current Lifestyle - 23%

Healthcare Expenses - 19%

Clearly, afraid of running out of money while alive is on the minds of Americans. Retired and still working – older and younger – the fear is palpable.

The principal causes of this fear are the other two fears: 1) being forced to live on less and, thus, giving up hard-earned and much enjoyed lifestyles and 2) becoming ill and being forced to use up life savings, either because of medical expenses or long-term care costs.

Moreover, 1 in 4 Americans have absolutely nothing saved for retirement. In fact, 1 in 4 Baby Boomers - the age closest to retirement - have less than $5,000 saved for retirement! And, nearly 1 in 5 Americans do not have a clue about how much they have saved for retirement.

Millennials are also not immune from these fears. Indeed, because of serious doubts about the future of Social Security and the virtual disappearance of pensions in the workplace, Millennials and Generation X’ers have even more to fear. Yet, one-half of Millennials have less than $5,000 saved for retirement and 37% of Millennials have absolutely nothing saved for retirement!

Given the volatile, uncertain and risky market choices – stocks, bonds, ETF’s and mutual funds – and the miniscule returns of safe strategies like CD’s and money market funds, what other choices do investors, both younger and older, have?

The first step should be finding advisors who only recommend strategies that are suitable for, and in the best interest of, their clients. This is the “Fiduciary Rule” that the Parker Financial Group abides by. Recent studies have shown that those who plan for retirement save three times more than those who do not, especially if they have the right advisors.

Regardless of one’s age, there are typically three crucial elements in a viable financial plan. First, calculate how much you will need over time. This means creating a personal budget. Then reassess these needs over time as your life situation changes. This is especially important for younger investors.

Second, create a balanced portfolio. Even the youngest of you, who can afford more risk because of the years you have left to experience both gains and losses, should have a significant portion of your investment dollars in something safe and guaranteed.

Third, set up automatic transfers from your monthly earnings while you are working into something safe that will guarantee a lifetime income. If you are retired, you should begin to transfer at least half, or more (if you are risk averse), from your at-risk portfolio to something safer. Would CD’s and money markets be the answer? Clearly not in this low interest rate environment. So, what would work for those who are currently employed and for those who are retired?

A recent study has shown that nearly half of Americans are interested in retirement products that protect their principal, even if the stock market goes down. But, no one is happy earning 1/10th of 1% in money market funds or 1% in CD’s.

So, what’s the answer? My clients, of course, already know. Indexed Annuities that guarantee participation in future market gains but protect against any market declines is the perfect solution. And, with the advent of Guaranteed Lifetime Income Riders that provide growth rates of between 6% and 8% per year for income (depending on when the investments took place), my clients know that they can set up lifetime income plans.

The peace of mind gained knowing you can never run out of money – no matter how long you live – is extremely reassuring. Plus, with the addition of enhanced long-term care benefit payments – the doubling of already guaranteed lifetime payouts – healthcare expense fears are greatly reduced or eliminated, as well.

It is never too late or too early to start an Indexed Annuity with Guaranteed Lifetime Income benefits attached. We can obviously help. If you would like more information on how all of this would work for you, your kids or your grandkids, please give us a call. We would be happy to meet with you and/or your family members to discuss setting up a plan.

Now that my daughter, Maddie, has joined the Parker Financial Group, we have a new set of eyes and a Millennial mind to help create new plans. Maddie would also be happy to meet with your younger family members over coffee or lunch outside of our office at a time and place convenient for them.

*Indexed Annuities Leadership Council Survey – June, 2016

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