Retirement Income

Retirement plan is also known as "pension plan". It not only allow you to save tax and defer taxes before retirement, but also allow you to obtain life-long income and medical care after retirement. A complete retirement plan is the guarantee of a high quality of life in the future. All this good life requires advance planning. During the working years, you must be prepared to support the period during which you have no income during retirement. As a person grows older, the medical expenses will increase significantly because of deteriorated health and more prone to diseases. With the advancement of medical technology, people's life expectancy is getting longer. Therefore the retirement funds will need to support longer expectancy. The retirees can enjoy retirement without worrying of outliving the income.

Special

250% of the index return without cap offered by Allianz Benefit Control (ABC) Fixed Index Annuity

Retirement plan types

401k
Traiditinal IRA
Roth IRA
Corporation Pension (Pension Plan)
Annuity
Life Insurance

Common retirement expenses of retirees

Entertainment: theatre; movies; streaming; subscriptions; concerts
Family: visit children and grand-children; fund education; family vacation; pet care; visit relatives
Food: groceries; coffees; eat out
Healthcare: out of pocket; elective care; family health; unexpected events
Housing: mortgage; maintenance, repairs and renovations; homeowner's/rental insurance; lawn, home and cleaning services
Interests and hobbies: continued education; lessons; country club; gyms; leagues
Personal: clothing; shoes; hair
Taxes: property; income and capital gains; sales; automobiles
Transportation: day-to-day car; public transportation; travel; recreational
Unexpected expenses: parent and elder care; grandchildren care; cost of living increases; lawsuit

The goals of retirement strategy

Principal protection: portfolio value will never decrease due to the market volatility
Portfolio growth: portfolio value grows with an underlying index like S&P 500
Gain lock: any gain credited to the portfolio value is locked in and cannot be lost due to market volatility
Tax deferral: portfolio grows tax-deferred until income in withdrawn. this allows for faster growth than taxable funds and helps shore up retirement reserves
Guaranteed lifetime income: secure guaranteed income through scheduled payment installments for the rest of life
Lifestyle: retirees need 75%-85% of their pre-retirement income to maintain their lifestyle thru their retirement.
Longevity: retirees are living longer lives and enjoying more active years in retirement
Long-term care: healthcare costs can pose a significant financial burden on the retirement income

A comprehensive retirement strategy can rely on a number of stable money products

Fixed Index Annuity (FIA) - an insurance contract that earns interest based on the benchmark performance of an underlying index, such as the S&P 500.
Certificate of Deposit (CD) - a savings account with a fixed rate of return for a fixed amount of time.
Mutual Funds - invests in a variety of markets or securities to reach a stated objective.
Bonds - debt issued by financial institutions.

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