Educational resources to help you sort through the complexities of annuities and investing.
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Fundamentals of investing and working with a financial professional
Every successful retirement begins with a plan. While Transamerica believes that working with a financial professional is best, it is also important for you to be aware of the fundamentals of investing so you can shape the plan that is right for you.
Funding your retirement or other long-term goals is a two-phase process:
- During the accumulation phase the aim is to grow your financial assets by investing regularly according to a plan customized to meet your needs.
- During the payout phase you begin to tap into your accumulated financial assets to fund your retirement lifestyle or to pay for other spending priorities.
Once you move into the payout phase, making your assets last as long as they're needed requires careful planning. This is especially true considering increased life expectancies. Today, many retirements can easily last 20 to 30 years or longer.
If you're concerned about outliving your retirement assets, here are a few tips and suggestions that may help them last longer:
- Review your portfolio allocation. Should you move to a more conservative mix of investments in retirement? Since retirements can last for many years, should you consider investing at least a portion of your portfolio in assets geared toward long-term growth? Talk to your financial professional about what is best for your individual circumstances.
- Develop a realistic budget/spending plan. Consider everything you're likely to spend money on during retirement, including monthly fixed or variable living expenses, travel and recreation, health care, charitable contributions, even gifts. Draw up a realistic budget based on your spending plan - and stick to it.
- Factor in all sources of retirement income. In addition to retirement savings, be sure to include Social Security benefits and pension income in your planning, as well. Visit www.ssa.gov for information about estimating your Social Security benefits. For information about pension income for which you may be eligible, check with your employer's plan administrator.
- Start a part-time job or a new business. Many of today's retirees continue to work at part-time jobs or even start new businesses. Of course, any income you earn means that more of your retirement savings can remain invested.
- Think about long-term care. It's also important to consider the costs of long-term care, which can be substantial. Even a short nursing home stay could deplete your assets significantly, keeping you from generating steady, predictable income over time.
- Don't forget about tax implications. Receiving income from your retirement assets may trigger tax consequences. Consult a qualified tax professional for guidance on your particular situation.
- Don't forget about home equity. For many people of retirement age, home equity represents a major portion of total accumulated assets. You may want to explore ways to tap into your home equity, if necessary.