Higher average lifespans require careful financial planning
With life expectancy continuing to rise, the chances that your clients will reach their 90s or beyond are better than ever. That’s good news, of course, but it will require you to work more carefully than ever with them to help achieve their goals. Besides planning for the costs of housing, food and entertainment, you must help clients prepare for large health care costs in retirement.
For instance, the average 65-year-old couple retiring today will need about $245,000 just to pay for medical expenses not covered by Medicare. Fortunately, there are things you and your clients can do to make sure that their money lasts as long as they do:
Delaying retirement
For starters, encourage your clients to work longer. As the average lifespan increases, old rules about when to retire are beginning to dissolve. Many people will choose to work well beyond the formerly standard retirement ages. Working longer not only reduces the number of years you'll have to pay your retirement expenses, it also allows your savings more time to grow. Just as important, many older workers appreciate the psychological benefits that come from the active engagement and social connectivity that their jobs bring.
Delaying claiming Social Security
Delaying Social Security benefits can also boost retirement income significantly. Eligibility begins at age 62, but for every year your clients wait until age 70, the monthly payment grows 6-8%.2 That can translate into thousands of dollars over the years; the amount can be even higher for couples.
Consider lifetime protected income
While your clients are working, it’s critical that they save as much as they can in tax-deferred retirement accounts. Relying on retirement accounts and Social Security alone, however, may not be enough. Adding an annuity to clients’ retirement picture can add a guaranteed income option to their retirement plan.1 Some annuities’ payouts aren’t dependent on market performance, which means your clients won’t have to worry about the short-term ups and downs of the stock market. And helping your clients achieve a worry-free retirement is a goal worth pursuing.
1 Any guarantees are based on the claims-paying ability of the issuing insurance company.
This material was prepared to support the promotion of insurance products underwritten by GWFS Equities, Inc., Member FINRA/SIPC and issued by Great-West Life & Annuity Insurance Company (GWL&A) or in New York, Great-West Life & Annuity Insurance Company of New York (GWL&A of NY). Any guarantees are subject to the claims-paying ability of the insurer and do not apply to the subaccounts. GWFS Equities, Inc. is a wholly owned subsidiary of GWL&A. GWL&A is not licensed to do business in New York. Contracts may not be available in all states.
Before purchasing a variable annuity, investors should carefully read the prospectus which contains an annuity’s investment objectives, risks, charges, expenses, and other information associated with the annuity and its investment options. You may obtain a prospectus for the annuity and its underlying funds by calling 877-723-8723. Great-West Life & Annuity Insurance Company and Great-West Life & Annuity Insurance Company of New York do not offer or provide investment, fiduciary, financial, legal, or tax advice, or act in a fiduciary capacity, for any client unless explicitly described in writing. Please consult with your investment advisor, attorney and/or tax advisor as needed.
Variable annuities are long-term investments and may not be suitable for all investors. Earnings are taxable as ordinary income when distributed and may be subject to a 10% additional tax if withdrawn before age 59 ½. An investment in a variable annuity is subject to fluctuating values of the underlying investment options, and it entails risk, including the possible loss of principal. A withdrawal charge may also apply.
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