Covering Essential Expenses in Retirement

Covering Essential Expenses in Retirement

Today’s retirees face unique challenges — including prolonged periods of market uncertainty and longer average lifespans — which make thoughtfully planning for retirement more critical than ever. For most, feeling more confident about retirement comes down to the ability to pay for essential expenses — the predictable and recurring costs of life’s necessities. Some of the most common essential expenses include food, home maintenance costs, mortgage or rent payments, taxes and insurance premiums.

How can you cover these expenses?

Since markets will always fluctuate, having a concrete financial strategy that includesguaranteed or stable income sources can help you cover your essential expenses in all market environments. In fact, it’s a good idea to aim to cover 100 percent of your essential expenses with these sources of income during retirement.

If you’re nearing retirement, you may already have one or more sources of guaranteed or stable income in place, most notably Social Security. You may also have a defined benefit plan through your employer. Yet, no matter how strong these two sources of income may be, they might not be sufficient to cover your essential expenses in retirement. This means that you willlikely have to rely on your savings to pay some of your basic living costs.

There are several financial solutions that offer guaranteed or stable income and can help you cover the gap between what you have in place and what you’ll need, for example:

The unique features of annuities offer opportunities for tax deferred future income growth. There are also many different optional features and benefits that may be available for an additional cost with annuities. In return for the benefits they provide, annuities carry a surrender charge and other fees.

Having the financial security you need to enjoy retirement takes planning and hard work. All of these investment choices can provide a regular stream of income over time, so you can count on payments to help you meet the challenges of an uncertain environment. Consider working with a financial professional who can help you find the best financial strategy for you based on your financial situation and goals.

T.J. Spizzo is a CERTIFIED FINANCIAL PLANNER ™ Professional, CRPC® and Financial Advisor with Ameriprise Financial. He works with individuals, families and small business, offering personalized advice. This includes investment management, in conjunction with estate, retirement, education and insurance planning. He currently resides in Mahwah with his wife Tiffany and four daughters. He can be reached with questions at his office 201 221 2700 x2712 or emailAnthony.j.spizzo@ampf.com ,http://www.ameripriseadvisors.com/anthony.j.spizzo/profile/ 

Ameriprise Financial and its representatives do not provide tax or legal advice. Clients should consult their tax advisor or attorney regarding specific tax issues.

Any guarantee by the U.S. Government, its agencies or instrumentalities applies only to the payment of principal and interest on the guaranteed security and does not guarantee the yield or value of that security.

Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC.

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