Unfortunately in today’s economy you may not find a new job immediately, which means you may not have a new 401k plan ready to receive the funds from your old 401k. Therefore, it makes sense to open an Individual Retirement Account (IRA). In addition, an IRA offers certain advantages when it comes to saving for retirement. A traditional IRA allows you to invest pre-tax dollars and pay taxes when you withdraw. A Roth IRA allows you to invest after-tax dollars and pay no taxes when you withdraw. Once an IRA account is established, you may then choose how to use your money for investments or retirement income.
If you are unemployed or facing unemployment through layoff, income generation may be top of mind. Depending on your age and retirement savings amount, there are several options you may explore that may provide immediate or deferred income. One of these options is an annuity, which is an insurance contract between you and a life insurance company that can provide regular income payments over a period of time, beginning at some point in the future.
We get asked this question several times a day. And, it’s a subject we talk about in depth each week on our radio show, Safe Money Talk Radio. The truth is: we can’t answer this question until we know more about you, where you are in your retirement income planning, and what your income goals are during your retirement.
That said we would like to share with you several client scenarios that we see every day in our practice. These real-life financial stress points have driven thousands of individuals to contact us for more information on how fixed index annuities may fit into their retirement income planning.