Luis Mendez

Investment Advisory Services offered through Retirement Wealth Advisors, (RWA) a Registered Investment Advisor. Gables Financial Partners and RWA are not affiliated.

Fixed Insurance and Annuity product guarantees are subject to the claims-paying ability of the issuing company and are not offered by Retirement Wealth Advisors.

This material has been prepared for informational and educational purposes only. It is not intended to provide,and should not be relied upon for, accounting, legal, tax or investment advice. Annuities are insurance products backed by the claims-paying ability of the issuing company; they are not FDIC insured; are not obligations or deposits of, and are not guaranteed or underwritten by any bank, savings and loan or credit union or its affiliates; are unrelated to and not a condition of the provision or term of any banking service or activity.

Guaranteed lifetime income available through annuitization or the purchase of an optional lifetime income rider,a benefit for which an annual premium is charged. Annuities are long-term, tax-deferred vehicles designed for retirement and contain some limitations. Earnings are taxable as ordinary income when distributed, and if withdrawn before age 591/2, may be subject to a 10% federal tax penalty. Fixed Indexed Annuities do not participate in any stock or equity investments. Limitations and restrictions apply, including withdrawal charges and recapture charges. During the withdrawal and recapture charge period, the annuity’s cash withdrawal value may be less than the premium. For costs and complete details, contact your Licensed Insurance Professional.
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Problem: It’s always best to start your planning with those things you are certain about.There are some forms of income that are fixed and guaranteed. You know that you’ll receive the income and you know generally what the amount will be. The income doesn’t fluctuate based on things like stock market volatility or interest rate changes.

Knowing your base of guaranteed income will give you an idea of whether you have enough money to cover your most urgent expenses. If you’re fortunate enough to have a significant amount of guaranteed income, you may have a nice foundation from which to build. If not, you may need to do some extra planning.

The three most common sources of guaranteed income are pensions, Social Security and fixed annuities. Pension benefits are partially protected by the Pension Benefit Guaranty Corp., a federal government agency. Guarantees provided by annuities are the responsibility of the issuing insurance carrier.

Social Security faces some financial challenges, but it’s likely to still be a reliable source of income for those who are approaching retirement. The Social Security retirement trust fund is projected to run out in 2033, but even after that point, it still should offer benefits. Younger generations may face cuts, but your benefits should still be available.

Solution: Organize all of your statements from your sources of guaranteed income. Those could include your pension at your current or past employers. It should also include your Social Security statements and statements for any annuities that you may own.

Estimate the guaranteed income from those sources and add it all up. If that information isn’t easy to find, contact a financail professional. We can review your statements and help you collect this important information.

Annuities are insurance products backed by the claims-paying ability of the issuing company; they are not FDIC insured; are not obligations or deposits of, and are not guaranteed or underwritten by any bank, savings and loan or credit union or its affiliates; are unrelated to and not a condition of the provision or term of any banking service or activity. Guaranteed lifetime income available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are longterm, tax-deferred vehicles designed for retirement and contain some limitations

Problem: Once you’ve totaled up the annual amounts of guaranteed income you’ll receive, you need to nail down when you will actually receive the payments. This is especially true if you don’t have much in savings and you’re operating on a tight budget. Not getting a payment when you expect it could send you into a cash flow crisis.

Make sure you know when you’ll receive income so you can plan your income and expenses on a monthly basis. Social Security usually pays benefits monthly, and the exact day of the month depends on your date of birth. Pensions could pay quarterly, monthly or even bi-weekly. The payment frequency for an annuity could also vary.

Solution: Contact Social Security, your pension provider and your annuity agent or insurer to find out when you’ll receive benefits. Once you have that information, put it on a calendar to see how and when income will flow into your bank account each month.

Problem: This is the big question. It will help determine how much additional planning you may need to do. If your guaranteed income exceeds your required spending every month, then you at least know that you have enough money coming in to cover basic expenses and maintain a comfortable lifestyle.

However, if your guaranteed income is less than your required expenses, you could have some difficulty maintaining your quality of life. That’s especially true if you don’t have a nest egg in non-guaranteed sources, like your 401(k) or IRA. You may need to implement strategies to help you cover the shortfall.

Solution: Sit down with a financial professional and compare your guaranteed income to your required expenses. They can identify areas where you may be short or where you could face a cash crunch.

Problem: It would be great if you could cut your expenses enough to get under your guaranteed income level. That’s not always reality, though. There are some minimum expenses you just have to pay. So, what do you do if you can’t cut your expenses enough?

One option is to increase your guaranteed income. You could get a part-time job to bring in more money, but that may not be conducive to your schedule, desires or health.

There are a variety of investment and insurance vehicles that can generate guaranteed income.They come with their own benefits, costs and risks, so it’s important to consider your options carefully before committing to anything.

Solution: Meet with a financial professional. He can review your entire financial picture and recommend solutions. He may recommend a fixed indexed annuity, which can help you grow your nest egg in a tax-deferred, low-risk way until you reach retirement. At retirement, you can then turn that annuity into lifetime guaranteed income.

Problem: This may not be pleasant to think about, but it’s a reality for many people. Dementia, Alzheimer’s and other diseases can rob you of your ability to make and communicate your decisions late in life. Although you may not be able to stop the disease, you can take steps to protect your assets, income and legacy.

Problems often arise when there are no clear goals or wishes stated in writing. Various family members may try to make decisions, often with only the best of intentions. However, those decisions could go against your wishes.

The best steps you can take are to put as much information as possible in writing. Various powers of attorney documents can designate who can act on your behalf if you’re unable to make decisions for yourself.

Solution: Talk to your financial professional and attorney to make sure you have the appropriate documents in place. The professional could also recommend financial solutions that provide additional protection and limit the number of people who can access them. A happy and successful retirement starts with sufficient planning. By planning early, you give yourself the opportunity to take action and correct potential issues before they become reality.