Receiving that last paycheck can be very unsettling for most people entering retirement. A rational calculation of preparedness only modestly soothes the emotional fear of running out of money. Knowing with certainty there will be a check coming in every month can provide considerable emotional relief.
Historically, Social Security has provided at least a good portion of this relief. In fact, Social Security is typically the largest annuity most people have. Retirees know it will be there, and they know they can’t outlive the income.
But have you read your Social Security statement lately? In it, there’s a line that says: “The Social Security Board of Trustees now estimates based on current law, in 2037, the Social Security Trust Funds will be able to pay approximately 78 cents for each dollar of scheduled benefits.” Do any of us believe Social Security will be as good in the future as it has been in the past?
The answer is unknown, which only adds to the stress and uncertainty of retirement, particularly with so much discussion in Washington, D.C. about possible changes to Social Security and other programs that aid seniors.
Annuities work like Social Security
Social Security works in the same way as any annuity, with initial payments going in and set amounts coming out each month beginning at a certain age. Once we’ve invested in an annuity, it never goes away as long as we’re alive to benefit from the income.
Fortunately, though, anyone can invest in a guaranteed annuity that can be customized to fit the individual’s exact needs. Whether deferred or immediate, variable or fixed, customized or pre-determined investments, individual annuities offer the comfort of a guaranteed income for life and the emotional relief every retiree craves.
It’s important to remind your clients they don’t have to rely on the government or legislators to create their own retirement security. They can control their own financial destiny, despite whatever happens with Social Security or Medicare. Diminish the fear of retirement by helping clients realize the benefits of annuities they can secure themselves—ones that won’t begin to disappear in 2037.
Michelle L. Hoesly offers investment advice through Resource 1, Inc. Securities are offered through Ceros Financial Services, Inc. Member FINRA/SIPC (not affiliated with Resource 1, Inc.).