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Focus on cash flow during retirement

I recently came across a post on a large national newspaper’s blog talking about how investors should focus on generating cash flow during their retirement years.

This makes a lot of sense. Many savers get discouraged when they discover how much money they’ll need to accumulate before retirement. The blog post provided this example:

If you were using a “safe” annual withdrawal rate of 4%, you’d need to have $1.5 million saved in your retirement portfolio in order to enjoy $2,500 in monthly income over the course of 30 years.

Overall, the article offered some sound advice with tips like generating retirement cash flow from dividend investing, rental properties, and part time work.

However, in a discussion on generating income in retirement, there was a glaring error of omission. There was not a single mention of the benefits of owning an annuity.

Despite a lot of popular and pervasive myths out there, all annuities are not created equal. And they’re not all bad for you. In reality, the right annuity may be one of the strongest options out there that generates guaranteed retirement income––income you can’t outlive.

Just this week, we provided an Income for Life illustration for a client. The gentleman was 62 years old, lived in Texas, and wanted to see what type of income $500,000 from his 401k could generate during his retirement years. Based upon his specific retirement goals, we suggested a Fixed Indexed Annuity with a 5% income rider and a 25% premium bonus. With this annuity, his pre-tax income from his premium would equal $34,453 per year. That’s $2,768.75 per month, a couple hundred bucks more than the 4% example on $1.5 million in savings that we showed above. His annuity includes a death benefit, which means when he passes on, his heirs will receive whatever is left of his original premium, less any income paid prior to his passing.

That doesn’t sound so bad, does it?

Why worry about what the future will bring? Especially when it comes to how much lifetime income you can enjoy in retirement.

Find out for sure what kind of guaranteed lifetime income an annuity could provide to you. Simply click here to request your free Income for Life Illustration

Remember, as with all retirement products, there are pros and cons on owning an annuity and we’d be happy to discuss them with you in detail.

About the author…
Cathy Dewitt Dunn is the driving force behind Annuity Watch USA. For over 15 years she has provided personal financial management to individuals and families who are looking for financial solutions that are not available in traditional brokerage houses. Her consulting style is to sit and listen, building a thorough understanding of a client’s wishes and fears––then she presents a plan in plain English that makes sense for them. Investing with Cathy is not complicated. Each investment strategy or product she recommends is structured around protecting and growing retirement assets.


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