In Retirement

Bill's retirement is in full swing. He is worried about depleting his income sources by withdrawing too much too soon. At the same time, he wants to keep his money ahead of the inflation curve.

Bill sold his home for a profit and put some of the proceeds into an immediate income annuity. His house profits have now been converted into a stream of income that will help cover his day-to-day expenses and provide him with a stream of retirement income he can't outlive.

There are several types of annuities, but the one that can help generate income as soon as it is purchased is called an immediate income annuity. By converting a portion of your assets into an immediate annuity, you may be able to cover your basic living expenses with a guaranteed stream of income throughout retirement.

Annuities are also flexible, allowing you to customize your payments (monthly or bimonthly). The amount you receive will depend on the type of immediate annuity you purchase and other factors such as your age, the time of purchase and interest rates at that time, and the payout option selected.. A fixed immediate annuity will provide you with the same amount for every payment, while the amount you receive from a variable immediate annuity will fluctuate with the market value of the selected funding options.

Immediate income annuities can be a key component to your retirement savings plan. You may have more questions about annuities, so let MetLife help you decide which one might be right for you. Learn more about Annuities.

To supplement your retirement income, you may opt to take a reverse mortgage--converting part of the equity in your home into liquid assets —without having to sell your home, give up title to it, or make monthly mortgage payments. You can choose to take the money from the reverse mortgage as a monthly payment to supplement your existing income, as a line of credit, or as a lump sum. While a reverse mortgage may be a good option to supplement income for certain people in certain circumstances, it is not for everybody. Eventually, either upon death or if you move out of the house, the property will likely have to be sold to repay the borrowed funds plus all accrued interest. The amount owed may be more significant then anticipated. Reverse mortgages are also subject to fees and charges, and the interest rates charged on the borrowed funds may be higher than those attached to traditional loans. Homeowners should consider all risks and consult with an attorney before taking out a reverse mortgage.

Medicare is our country's national health insurance program. You will be eligible for Medicare after you turn 65, whether you continue to work or not. Medicare has two parts:

• Part A. Hospital insurance that helps pay for inpatient hospital care and some follow-up services.
• Part B. Medical insurance that helps pay for doctors' services, outpatient hospital care, diagnostic tests, prosthetic services, physical therapy and other medical services. Part B is an optional program, and you pay a fee for benefits.

Since Medicare will not cover 100% of your medical expenses, you should:

• Make sure that other health insurance coverages you have, such as an HMO or employer's plan, knows you are eligible for Medicare.
• Consider obtaining a Medigap insurance policy that may cover Medicare's deductibles and "fill in the gaps" in your Medicare coverage.

A Medigap policy is health insurance sold by private insurance companies to help pay some of the health care costs that the Medicare plan doesn’t cover. Insurance companies can only sell you a “standardized” Medigap policy. These Medigap policies must all have specific benefits so you can compare them easily—choose from up to 12 different standardized Medigap policies (Medigap Plans A through L).

It’s important to compare Medigap policies because costs can vary; however, the benefits in any Medigap Plan A through L are the same for any insurance company.

Your retirement plan should also include financial solutions for unforeseen long-term care expenses that may not be covered by your healthcare plans.

There are different ways in which people manage long-term care expenses. One approach is to pay for long-term care themselves. They may also choose to rely on family, relatives and/or local social service resources. Another approach is long-term care insurance.

Learn more about Long-Term Care Insurance

You may wish to work in some capacity after you retire, but know that while you're working, your Social Security benefit amount will be reduced, but only until you reach your full retirement age. You can use the following formula to determine how much your benefit will be reduced: If you are under full retirement age (currently age 65) when you start collecting Social Security payments, $1 in benefits will be deducted for each $2 you earn above the annual limit (the annual limit, or retirement earnings exempt amount, is determined by an automatic adjustment procedure that will be adjusted periodically). In the year you turn full retirement age, $1 in benefits will be deducted for every $3 you earn above a different limit, but only counting earnings before the month you reach the full benefit retirement age. Starting with the month you reach full retirement age, you will receive your benefits with no limit on your earnings.

When figuring out how much is deducted from your benefits, only the wages you make from a job or your net profit if you're self-employed is counted. This includes bonuses, commissions and vacation pay, but not pension, annuities, investment income, interest, veterans or other government or military retirement benefits. It is important to remember that when you continue to work while you get benefits, Social Security will check your record every year to see if those additional earnings will increase your monthly payment. If there is an increase, they will send you a notice of your new benefit amount.

The simplest way to ensure that your funds, property, and personal effects will be protected and distributed according to your wishes is to prepare a will. To ensure your wishes are acted upon, there are three important documents you should consider drawing up now—such as a:

• Living will. This document tells doctors exactly what kind of care you want and don't want to receive if you become terminally ill or incapacitated.
• Durable power of attorney for healthcare. Allows you to name a person who will make medical decisions for you if you are unable to make those decisions on your own; also know as a healthcare proxy.
• Durable power of attorney for finances. This document designates the person who will handle financial decisions for you.

All of the documents need to be executed at a time when you are able to make decisions, so it's important to put them in place as early as possible.

Learn more about Making a Will.

Having a life insurance policy in place can help provide guaranteed* income for your loved ones and lessen their financial burden when you’re no longer here. The money can help with everything from mortgage payments to college tuition.

Learn more about Life Insurance