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Retirement Options To Not Outlive Your Retirement Savings
Retirement Options To Not Outlive Your Retirement Savings
Jan 18, 2023
Blueprint Income Team
The most prevalent retirement options today present a great risk: you could outlive them. Here we present five retirement options you can't outlive.
- The retirement landscape has changed significantly over the last generation, due in large part to increasing lifespans and the decline of employer pensions
- Retirement options do exist to get a guaranteed monthly paycheck that lasts your lifetime, including new, lower minimum products available digitally
I’ve been writing recently about the trends related to longevity and how they impact the retirement landscape. Today, I focus on five retirement options to get lifetime income that comes every month and is guaranteed for as long as you’re alive (so that you don’t outlive your retirement savings).
If you don’t have guaranteed monthly income, you’re forced to guess how long you live and spread your spending appropriately over time. It’s a hard thing to accomplish, and just about everyone gets it wrong.
Today’s most popular retirement options provide you with an asset base to draw down, but no guarantee that the assets you’ve saved will last as long as you’re alive.
Table of Contents
Retirement Option #1: Longevity Annuity
A longevity annuity is issued by an insurance company and is also known by the names longevity insurance and deferred income annuity. You can purchase a longevity annuity for yourself from an insurance company using your pre-tax or post-tax retirement savings, generating a guaranteed income that lasts as long as you do. It’s a great way to diversify your portfolio, and make sure that all, or most, of your basic retirement expenses will be covered for as long as you live. Historically, a longevity annuity required a large upfront purchase and was bought all at once, usually close to retirement. At Blueprint Income, we’ve made it easier to get a longevity annuity.
How Can I Purchase a Longevity Annuity?
At Blueprint Income, we offer longevity annuities from more than 15 top rated insurance companies. Click below to get real-time personalized quotes.
From there, you’ll get access to our annuity guides and team of specialists to help you analyze your retirement finances and walk you through the application process.
Retirement Option #2: Immediate Annuity
If you want the income to start right away, you can purchase an immediate annuity. This is basically the longevity annuity explained above, but for people who are already in or approaching retirement. Because the immediate annuity starts paying out — well, immediately (or at most within 12 months) — the payouts you’ll get per dollar of premium will be lower than with other kinds of longevity annuity. (So, if you have the ability to start funding your retirement income earlier, rather than later, you should.)
How Can I Purchase an Immediate Annuity?
At Blueprint Income, we offer immediate annuities from more than 15 top rated insurance companies. Click below to get real-time personalized quotes.
From there, you’ll get access to our annuity guides and team of specialists to help you analyze your retirement finances and walk you through the application process.
Retirement Option #3: Employer Pension
If you’re lucky enough to have a pension through your employer or union, then you’re far ahead of most folks. But the only way a pension provides longevity protection is if you don’t opt to get the lump sum payment. An employer pension plan is obligated to pay you a monthly income unless you opt out. If you opt out, you’d get a set amount at retirement and lose all the longevity protection of monthly lifetime income.
Retirement Option #4: Social Security
The best way to use Social Security as longevity insurance is to delay receiving payments for as long as possible. Each year you delay beyond what Social Security Administration defines as full retirement age increases your future monthly payments by 8%. Currently, the longest you can delay Social Security is until age 70.
There are many other retirement options out there. A 401(k), IRA or real estate are popular examples. But none of these provide a guaranteed amount of income each month, no matter what happens in the market or how long you live. The products above are the only retirement options that ensure you don’t outlive retirement savings, and we believe, along with leading academics, that they belong in everyone’s retirement portfolio.
Blueprint Income Team
We are a team of finance, insurance, and actuarial professionals working to make it easier for everyone to achieve a steady and comfortable retirement. We write about annuities (the good and the bad) and provide strategies to help Americans prepare for retirement.
