BACK: Pat Buchanan, Jeff Rodemeyer, Jordan Cox
FRONT: Rick Aussprung, Jeff Kolzow, Colton Sheley
As defined benefit pensions disappear, it may be up to you to create a guaranteed income stream.
First came pensions, or defined benefit plans, with their guaranteed income for life. Then came 401(k)s with their focus on growth from the stock and bond markets. The two were meant to work together, but with defined benefit pensions quickly becoming a thing of the past, many people are left with only a 401(k) plan. While 401(k)s are an important piece of retirement savings, they were never intended to be a standalone retirement solution.
The 401(k) was meant to provide supplemental retirement savings in conjunction with pensions, savings and other income vehicles to paint a fuller retirement picture. Additional resources can be used to buttress your 401(k) and pension payments in order to build out a full retirement strategy.
What could a soon-to-be retiree do about replacing that old defined benefit plan, which offered guaranteed income? What if you are one of the many people receiving a lump sum from a retirement plan or have a windfall event where you receive a sum of money?
One option could be a deferred income annuity. A deferred income annuity (DIA) allows you to set up a guaranteed income stream beginning later in life. Remember, the guaranteed income is based on the strength and claims paying ability of your financial institution. The DIA traditionally is funded with a lump sum payment, and the contract promises to pay you a lifetime income stream starting with a date of your choice.
For example, let’s say a DIA is purchased with a $50,000 lump sum. Your financial institution will hold the money for a defined period where it will grow with interest. After a specified amount of time has passed, you can start receiving payments.
Many options are available when it comes to retirement strategies. With traditional pensions disappearing from the landscape, plenty of options let you design personal solutions for your own retirement. The key is knowing your options and working with a financial professional who can help guide you toward a stable retirement.
Thrivent Financial is represented in the Red Mountain area by Red Mountain Group, which includes Jeff Kolzow, Pat Buchanan, Jeff Rodemeyer, Rick Aussprung, Colton Sheley and Jordan Cox. The office is located at 2941 N. Power Road, Suite 105. Call (480) 396-5333. 1490688-050316