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Retirement may last longer than you think.

Realities of Retirement

Retirement may last longer than you think. You may need to plan for a retirement that lasts 30 years or longer. What’s more, the wealthier you are, the longer you may live. Increasing longevity introduces new challenges. Will you outlive your money? What is your greatest worry about a long retirement? The reality is that you could end up living a lot longer than you may think.

The reality is that you could end up living a lot longer than you may think.

Plan for a long retirement.

Consider the probabilities of a 65-year-old living well into his or her 90s—if not to age 100.

– Nearly a 1 in 3 chance a 65-year-old female will live to 95
– 1 in 5 chance a 65-year-old male will live to 95

This could mean spending three or four decades retired and without a regular paycheck.

Increasing longevity introduces new challenges.

Will you outlive your money?

While increasing longevity is a reason to celebrate, it also introduces new challenges.

– 35% of Americans surveyed say that serious health problems worry them the most with respect to living to 100.

Being a burden on family and running out of money to live comfortably were also identified as top worries. What are your top retirement worries?

Generating Reliable Income in Retirement.

When interest rates are low, it can be particularly challenging to generate enough income from fixed income investments. You may not be able to count on traditional approaches for generating retirement income from your investment portfolio, such as the “4% Rule.”* Market performance in the early years of retirement can impact how long your savings may last. An annuity is one potential solution for generating the additional guaranteed lifetime income you may want and need to help cover your expenses in retirement.

*The 4 Percent Rule is a long-held rule for withdrawing retirement income from an investment portfolio. Based on research pioneered by financial planner William Bengen in 1994, the rule suggested that one could safely take 4% inflation-adjusted withdrawals each year from an investment portfolio of stocks and bonds (50% stocks/50% bonds) without running out of money over a 30-year period.

Looking for more yield in today’s low interest rate environment?

Generating income in a low-rate environment.

Retirees have often turned to fixed income products to help generate the predictable retirement income they need.

Unfortunately, the yields on many fixed income products have declined sharply in recent years. This can make generating income from these types of products particularly challenging.

A look at sustainable withdrawal rates in today’s environment.

One longstanding “RULE” for generating income may no longer be viable.

If you thought you could count on the “4% Rule” for generating retirement income from your portfolio, you may have to think again.

Research shows that in today’s interest rate and market environment, you may only be able to withdraw 2.35%, adjusted for inflation, from a portfolio allocated 50% to stocks and 50% to bonds and have a high degree of confidence that your money will last over a 30-year retirement.

Today’s pre-retirees and retirees face a number of key risks.

Preparing for the unknowns.

Those seeking to generate reliable income from their savings and investments face several key risks that need to be managed.

– Where is the stock market headed next?
– How long will your retirement last?
– Where can you go to generate more income in today’s low interest rate environment?

Market Performance – Impact Once Withdrawals Begin

The sequence of returns can have a critical impact on portfolio value when you are taking withdrawals.

– Three investors made the same initial hypothetical investment of $1,000,000 upon retirement at age 65.
– All had an average annual return of 7% over 25 years, which followed the same sequences as during the savings phase.
– All made withdrawals of $60,000, adjusted annually for inflation.
– At age 90, all had different portfolio values due to annual withdrawals.

A look at the different types of annuities and several key benefits.

Annuities offer a powerful combination of benefits.

When it comes to securing reliable income in retirement, an annuity can offer you a number of key benefits, including protected lifetime income for as long as you—or you and your spouse live— depending on your choice of a Single Life or Joint Life income option.

Social Security Optimization (SSO) is a planning strategy that aims to produce a fortified income plan funded with the lowest possible amount of client-provided retirement capital.

What is Social Security Optimization?

Social Security Optimization is a quantitative approach that helps determine which Social Security filing strategy may be appropriate for your client’s situation.

How is Social Security Optimization different from Social Security maximization?

Social Security maximization focuses on the amount of cash flow various filing options may provide over a defined period of time. The timeline utilized is normally defined by the age a client intends to retire and the anticipated length of time in retirement (based upon a standard mortality table). Maximization strategies do not factor in the role Social Security can play in mitigating the effects of longevity, inflation and taxes on the long-term sustainability of retirement plan’s capital. Social Security Optimization quantifies this role, providing meaningful analytical information to support decisions on how to use Social Security benefits to fortify a retirement income plan.

Is this just a way to encourage everyone to wait until age 70 before filing for benefits?

No. Social Security Optimization is focused on determining which filing strategy can help deliver a client’s retirement income goal for the least amount of capital, when considered along with other forms of guaranteed income. For example, if one spouse has a higher income and is still working, the appropriate filing strategy may be for the spouse who earns less to claim earlier.

How do I find the "breakeven" point?

The concept of “breakeven” is based upon a simplistic analysis that does not take into consideration the implications of the Earnings Test, tax efficiencies or cost-of-living adjustments. In order to accurately quantify the so-called breakeven point, each one of these items needs to be accounted for as they may have a significant impact on the outcome.

Can clients speak to the Social Security Administration about their filing options and get a similar answer?

No. Social Security Administration (SSA) claims representatives are not equipped to provide Social Security claiming advice within the broader context of an overall retirement income planning strategy. In fact, the SSA specifically instructs their claims representatives NOT to give advice. (

Rather than waiting, isn't it better for clients to take Social Security as early as possible, investing the extra monthly cash flow so if they do live beyond age 70, they can use the accumulated savings to make up for what was foregone by taking benefits early?

Determining the value of waiting requires analyzing its “economic value.” This means quantifying exactly how much Social Security income, after taxes and the earnings test, clients would have available to invest were they to take benefits early. For someone with a Full Retirement Age (FRA) of 66, current formulas provide a minimum of 76% more income at 70 than what they would have received at 62. Offsetting the 76% increase Social Security would have automatically provided would require a 100% savings rate and a return on those savings of nearly 30% between age 62 and 70.

Not affiliated with or endorsed by the Social Security Administration or any governmental agency. For financial professional use only. Not to be used with the offer or sale of annuities. This material is provided by Athene Annuity and Life Company (61689) headquartered in West Des Moines, Iowa, which issues annuities in 49 states (excluding NY) and in D.C., and Athene Annuity & Life Assurance Company of New York (68039) headquartered in Pearl River, New York, which issues annuities in New York. This material contains educational information regarding the availability and details surrounding the Social Security program and is not intended to promote any product or service offered by Athene. The information represents a general understanding of the Social Security Program and should not be considered personalized advice regarding Social Security, tax, or legal advice. Details of the Social Security Program are subject to change. Please consult with your tax or legal advisor regarding your individual situation prior to making any decisions. Visit for additional details.

39 Years of Experience

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Keibler & Associates has been helping people with financial planning for 39 years. We know how hard it is to understand all the financial issues involved with caring for your loved ones in nursing homes or assisted living. You can trust us to guide you through the financial aspects of it. Keibler & Associates offers free consultations to evaluate your situation and present a proposal at no charge to your family.

To us, You are Family.

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