How to guard against financial risk with guaranteed retirement income
Financial risks can strike at any time and can have a devastating impact on
your retirement savings. Which risks should you be aware of? Let's take a
look at a few of the most critical risks:
- "Black swan" events
Impossible to predict, black swan events swoop in out of nowhere
and strike hard. The 2001 dot-com bubble, 9/11, and the coronavirus
pandemic are all examples of black swan events, which can have a
negative impact on your retirement savings.
- Market volatility
Beyond these outliers, retirement income can also be impacted by
normal market volatility. And if the market dips in the very early years
of your retirement, it can have an even greater impact on retirement
savings (this financial phenomenon is known as sequence of returns risk).
The rate at which the price of goods increase—otherwise known as
inflation—can dramatically reduce the buying power of your savings.
Case in point: assuming a 4% annual inflation rate, $219 in 2042 will only
be able to purchase the equivalent of $100 worth of today's goods. As
we've seen, inflation can even reach 9% or more, which can severely
diminish retirement income.
Many people underestimate the cost of healthcare in retirement.
According to HealthView Services, an average, healthy 65-year-old
couple retiring in 2021 will spend $662,156 on their healthcare costs
throughout retirement. While we all hope that we'll be as healthy as
we can for as long as we can, that's not always the case. The cost of
battling a serious disease can run into the millions, and according to
LongTermCare.gov, someone turning age 65 today has almost a 70%
chance of needing some type of long-term care, which can be a serious
drain on retirement income.
Creating a retirement income shield
Whether it's a black swan event, market volatility, inflation, or a healthcare
emergency, financial risk can strike at any time and without warning. So how
can you guard against financial risks? The answer is guaranteed retirement
Instead of being at the whim of the market, you can enjoy the reliability of
guaranteed retirement income with Income America™ 5ForLife. This all-in-one retirement investment provides retirees with 5% income for life—guaranteed.1 Structured as a series of target date portfolios and conveniently available through employer-sponsored retirement plans, Income America 5ForLife can help offer protection against market uncertainty and financial risks.
1 If the joint option is elected, the participant's payout will be lower
than 5%, depending on their age and their spouse's age.
With Income America 5ForLife, participants can get a reliable stream of
retirement income and can plan for their future with confidence. Here's how
- You invest in Income America 5ForLife through a plan that your
employer has set up. You can contribute via payroll deductions and/or
transfer money from other plan investments.
- Every dollar you invest counts toward your income base.
- Once you reach age 65, your income base locks in and can never
go down. The income base will be the greater of the amount you
contributed or the account's market value when you reach age 65.
- When you retire, you receive annual income payments of 5% of your
income base for the rest of your life—guaranteed.2
Preparing for future retirement income
Now's the perfect time to guard against future financial risks. Learn more
about Income America 5ForLife today.
2 The market value of your account is never guaranteed and
fluctuates based on investment
performance. To receive the guaranteed income, you must stay invested in Income America
5ForLife. If you withdraw more than the guaranteed income in any year, your income base and
future guaranteed annual income amount will decrease. Guarantees are subject to the claimspaying
ability of the issuing companies.