Near retirement? How to manage a financial storm

Catholic United Financial > Product News > Annuity > Near retirement? How to manage a financial storm

Financial losses in the stock market leading up to retirement can adversely affect your nest egg. The last thing you want is to run out of money. Catholic United Financial’s Advanced Case Specialist, John Tetzloff, has some ideas to help you through any financial market rough patch.

First off, it’s important that we all take a deep breath when we hear unsettling news on the value of financial assets, especially in a down market. When you’re age 65 or older, it’s especially hard and for good reason. If you have a plan — even better, a written plan of what you are trying to do — great! Review it with a trusted advisor for ideas and tips to make it better. Making rash and ill-conceived emotional decisions may cause regret and a doubling down of trouble. If you don’t have a plan, reach out to family or trusted advisors — you need to get a plan in place!

Secondly, with any financial plan, make sure you are diversified in a way that some of your money is protected. In other words, do you have some money parked in a place that’s protected from a market downturn? Many life insurance companies — including Catholic United Financial — can provide this “safe area” with fixed annuities. We have annuities that are guaranteed to provide a fixed rate of return over the lifetime of the contract and increase in value over time — with no sales charges or annual fees for maintenance or management.

Another way to minimize risk would be to delay retirement — from age 65 to 70, for example. Not sure if you want to do that? Even though your monthly Social Security benefit would increase every year you defer taking it (up to age 70), this might not be an option for you. Your spouse, family dynamics and other factors can impact your decision. If you can’t delay, the rate at which you withdraw from your retirement savings could help if everything is already in motion. A good rule of thumb is to have a withdrawal rate of 4 percent per year, but maybe lowering it to 3 percent for the first few years would help you in the long run.

You should also compare all of your guaranteed sources of income with your basic expenses, like housing, food, transportation, utilities, taxes and insurance. These expenses can often take up most of your guaranteed income, leaving room for little else. I’ve met with many folks who often cut it too close in the later years. If you can, consider creating more guaranteed income by using Catholic United Financial lifetime income annuities.

By creating more guaranteed income for life, you free yourself up to weather any financial storms near or during retirement, and give yourself enough time to enjoy the upside of the financial markets if you so choose.

In the end, ask yourself…would you sleep better knowing that you have a larger portion of your retirement funds placed in a safe and growing area free from fees, no matter what the market is doing today?

*A fee will apply to withdrawals made during the surrender period. See contract for details. Withdrawals prior to age 59 1/2 will be subject to government penalties. Minimum deposit required. Maximum issue age is 85. Catholic United does not offer tax advice. Consult with your tax advisor about your specific situation.