Why, you may ask? Well because retirement has different rules than when you were working for a paycheck. Everyone dreams about what life will be like not having to clock in from 8-5 but most don’t properly plan for the changes that happen. What changes are we referring to?
How much investment or market risk you are willing to stomach with your savings. Now that you need your nest egg to pay your bills and live your life, how much market volatility can you handle.
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How you feel about the retirement nest egg that you’ve worked so hard to save. What you want to do with those savings and how you want to spend your time.
Many of our clients talk about continued employment in retirement and we think that’s an amazing option if it fits what you want to do and how you want to spend your time. But when that time comes, many of our clients choose not to and according to Employee Benefit Research Institute, our clients are not alone. In their 2017 study they said that 79% of pre-retirees expect to have some sort of continued employment in retirement, but only 29% do so. Retiring is such a drastic change that the best laid plans sometimes don’t come to fruition. At CloudPrime Finance Investment we focus on creating dynamic retirement income strategies to meet your needs in this ever-changing world
With corporate pension plans vanishing you need ways to create pension like income streams in retirement. The foundation of steady guaranteed income in retirement can be the difference between running out of money in retirement and living the lifestyle you’ve saved so hard for. Take a look at the graphic below. To sum up the information – Retirees with not pension like income strategies are more likely to run a deficit in retirement.
At CloudPrime Finance Investment, we take the process of planning for these changes and implementing the appropriate strategies very seriously.
Programmed Withdrawal is a product offered by the Pension Fund Administrators for periodic payments (monthly/quarterly) to a retiree. It is a structured periodic payment based on the peculiarities of the retiree, the Retirement Savings Account balance is spread over the expected life span of the retiree while the funds remain in the custody and are managed by the Pension Fund Administrator. The benefits of programmed withdrawal over annuity include:
Programmed Withdrawal serves as social security for retirees while annuity does not qualify as social security.
Retirement benefits is in individual RSA account while Retirement benefits under annuity is in a pool of fund.
Retiree monthly pension is reviewed for enhancement from time to time under programmed withdrawal by the National Pension Commission, under annuity there is usually no incremental review of payment assured for life.
The investment income earned per contributor is credited into the RSA balance of the retiree while the profit on annuity fund belongs to the insurance company.
Annuity is guaranteed for only 10 years. If the Retiree dies after the guarantee period, beneficiaries are not entitled to the deceased balance in the Annuity pool. However, Programmed Withdrawal benefits the retirees as well as the next of kin, because the outstanding account The historical volatility and downside risk of each investment balance will be paid to the beneficiary upon retiree’s death
Most retirees will be on a fixed income, so it is important that an expense budget is created based on fixed income.
Your choice of the right health management plan is extremely important. Consider discussing your options with an expert who can help navigate through these issues to make the appropriate choice. Routine medical check-ups with health provider is also vital.
If possible, pay off all debts and do not create new ones. Bearing in mind that most people will be on a fixed income monthly
Most people collect their lump sum at retirement to have fun. Perhaps to travel or buy a boat. After all, as you get older, you may be inclined to stay at home and won’t get a chance to spend the money on something fun. But the question is “what if you live to age 90?” You need to keep some resources in reserve so you don’t become a burden to your family.
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