New York Life is targeting a new ad campaign that focuses on securing future streams of dependable retirement income according to a recent article in AdvisorOne. The idea they are trying to get at is that most Americans are losing the security of having a pension – an income sourceguaranteed by the corporation as a reward for lifetime employment.
However in today’s world, with frequent job changes, a stock market that performed poorly over the previous 10 years on average, and a recession-prone economy barely being propped up by Federal Reserve money printing and enormous borrowing by the government, pensions are not sticking around.
Therefore, there is a longing, a need so to speak, in people to have a guaranteed income source (in this case guaranteed by an insurance company instead of an employer). New York Life, a particularly solid insurance company is approaching advisors and encouraging them to offer life annuities as a ‘pension replacement’ according to the article.
My regular readers will know that I have talked about from time to time both here and at my company site (WHA) about how I and other “RMA”members of the Retirement Income Industry Association (RIIA) feel about income planning for retirees. The motto of the RIIA is to “first build a floor, then create upside.”
This means that especially for people without an enormous amount of financial capital (i.e. investments), the ones who may depend on social security for a fair portion of their retirement income, they should be particularly careful about investing too aggressively and should consider first securing a floor of income before taking risks. The “floor’ could entail a combination of social security, part time work, company pension, and cash turned into some kind of income stream, such as the above article talks about. In terms of retirement planning, for those worried about planning for their retirement income, or those simply interested in exploring various planning styles, checking out the concepts espoused by the RIIA can be helpful to anyone.
For more information on RIIA, go to their website for some handy information, links and publications:
For an interesting article I wrote about creating a floor try:
for more information about me:
Chris’ company site – Walnut Hill Advisors, LLC a financial planning firm based in Medford, MA outside of Boston
This article was meant to be educational and not advice. Please consult an advisor for advice and see my disclosure for more information