| PLANNING YOUR FUTURE |
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My Future
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In 2003, AXA Equitable conducted a Nest Egg Study, which revealed the following:
- Unmarried women are among the most likely to say they will assign a higher priority to providing a financial base for their retirement (66 percent). They are also more likely 43 percent) than married women (33 percent) to say they will assign a higher priority to providing a hedge against the possible loss of income.
- Women, regardless of marital status (50 percent), are significantly more likely than men (38 percent) to say that it is no longer realistic to think that their children will be better off than they are.
- Married women (27 percent) tend to be more concerned than married men (19 percent) about paying for their children's education.
- Unmarried women are the least likely to say they have a formal financial plan (51 percent).
Retirement Confidence
The Employee Benefit Research Institute (EBRI) conducted a 2005 Retirement Confidence Survey and found that:
- Today's average retiree enters retirement at age 62.
- 40 percent of retirees said they left the workforce earlier than planned. Of this group, 41 percent cited health reasons or disability as the reasons and 34 percent attributed their decision to changes in their company.
- About one-third of workers plan to retire before age 65, but 24 percent are likely to retire at age 66 or later.
Retirement Income Plan
Though retirement might come later, creating a retirement income plan should involve a number of factors, including:
Retirement duration: Longevity risk – outliving your assets -- is a consideration that didn't exist in the recent past. Depending on when you retire, you could require income to support you for 20 to 30 years.
Expected expenses: Do you have a mortgage? Are you planning to downsize or purchase a vacation home? How often do you plan to travel?
Long-term care: As you age, chances increase that you may experience a medical event requiring extended or recurring care not covered by Medicare or another policy.
Desire to leave an estate: Is it important to you to leave a legacy for your loved ones or charity, or are you more concerned with meeting your own expenses?
Annuities an Answer?
How much of your retirement income allocation should be placed in annuities is a function of individual needs and objectives. Ask yourself…
Are you especially concerned with making sure you do not outlive your money? Do you have enough income from other sources to meet expenses and simply want to leave your loved ones with as large an estate as possible?
The answers to these and other questions will determine how much of your assets should be allocated to annuities.
When you invest in a variable annuity, you may choose from a variety of stock, bond and money market portfolios. Keep in mind, though, annuities are long-term financial products designed for retirement purposes, and are subject to the same market fluctuations as any other variable investment, such as fluctuation in value and market risks, and there is a risk of loss to your principal.
Variable annuities offer tax-deferred growth potential and protect your beneficiaries in the event of your death. Variable annuities have limitations and charges for withdrawals in the policy's early years.
Note: If you are buying an annuity to fund a retirement plan that already provides tax deferral, you should do so for the annuity's features and benefits other than tax deferral. In such situations, tax deferral provided by the annuity is not an additional or necessary benefit.
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