During your working years, your portfolio may be positioned to generate the growth needed for your long-term retirement income goals. With time on your side, and depending on your risk profile, you may be willing to sacrifice some stability in your portfolio for potential market upside.
However, once you reach retirement, you’ll likely want to stabilize your assets to help sustain the lifestyle you desire. An income annuity can help you achieve these goals.
Portfolio Pressure in Retirement
During retirement, you’ll probably look at your assets a bit differently because your portfolio is entering into the distribution phase. That means there will be a great deal of pressure on your portfolio to minimize risk and generate income to cover your most important retirement expenses. Generally, retirees take a conservative investment approach and allocate their portfolio accordingly. However, there may also be a need for a moderate amount of growth to offset the potential effects of inflation, hedge against longevity risk, or help achieve legacy goals.
These seemingly conflicting needs can put pressure on your portfolio, which may lead to sub-optimal investments and inefficient distribution strategies. Fortunately, there is a way to optimize your retirement assets to provide secure income while also potentially investing for growth.
Pressure Relief Through Portfolio Optimization
Using a portion of your assets to purchase an income annuity will generate retirement that is guaranteed* to last your entire lifetime. This stable source of income reduces the risk of outliving your assets, otherwise known as income risk. The guaranteed income stream can be used to cover some of your most important expenses in retirement, such as food, utilities and prescription medications, so you can spend time enjoying your retirement instead of worrying about it.
Knowing this guaranteed income stream already covers many of your basic expenses each and every month can allow you to treat your remaining assets differently, and potentially invest with more confidence.
Overcoming Retirement Income Challenges
Taking Pressure Off Your Portfolio