By adjusting your personal retirement plan, you may be better positioned to generate enough income to last a lifetime.
Remember, retirement planning is ongoing. Periodic adjustments are needed to ensure that you'll continue on the path toward your retirement goals.
If you're in retirement, you may need to consider these questions:
- How can you continue to generate a stream of income?
- How can you help protect your retirement savings and assets from unplanned expenses?
- What effect will working during retirement have on your Social Security benefits?
MetLife can help you with all of your retirement decisions - before and after you retire.
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 if possible.*
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 income payments. 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, 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.
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, know 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.
People manage long-term care expenses in different ways. You can pay for long-term care yourself, choose to rely on family, relatives and/or local social service resources, or purchase long-term care insurance.
You may wish to work in some capacity after you retire, but know that if you work while claiming early Social Security benefits, your 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 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 are 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:
- 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.
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.
*This example is hypothetical and is for illustrative purposes only. It does not represent any particular MetLife product or a guarantee of any kind.
* Guarantees apply to certain insurance and annuity products, including optional benefits, (not securities, variable or investment advisory products) and are subject to product terms, exclusions and limitations and the insurer's claims-paying ability and financial strength.
Most insurance policies and annuity contracts contain exclusions, limitations, reduction of benefits, surrender charges and terms for keeping them in force. Your financial representative can provide you with costs and complete details.
A variable annuity is a long-term investment designed for retirement purposes. In essence, a variable annuity is a contractual agreement in which payment(s) is/are made to an insurance company, which agrees to pay out an income or a lump sum amount at a later date. There are contract limitations, fees, and charges associated with variable annuities, which include, but are not limited to, mortality and expense risk charges, sales and withdrawal charges, administrative fees, and charges for optional benefits. Early withdrawals may be subject to surrender charges, and taxed as ordinary income and, in addition, if taken prior to age 59½, an additional 10% federal income tax penalty may apply. Withdrawals reduce annuity contract benefits and values. Investments in variable annuities will fluctuate and values upon redemption may be less than the original amount invested. Variable annuities are not guaranteed by FDIC or any other government agency and are not deposits or other obligations of, or guaranteed or endorsed by, any bank or savings association.
Variable annuities are offered by prospectus only, which is available from your registered representative. You should carefully consider the product's features, risks, charges and expenses, and the investment objectives, risks and policies of the underlying portfolios, as well other information about the underlying funding choices. This and other information is available in the prospectus, which you should read carefully before investing. Product availability and features may vary by state.
The amounts allocated to the variable investment options of your account balance are subject to market fluctuations so that, when withdrawn or annuitized it may be worth more or less than its original value.
MetLife fixed income annuities, like all annuities, are insurance products and are not insured by the FDIC, the NCUSIF or any other government agency, nor are they guaranteed by, or the obligation of, the financial institution that sells them. All product guarantees are subject to the financial strength and claims-paying ability of the issuing insurance company.
Pursuant to IRS Circular 230, MetLife is providing you with the following notification: The information contained in this document is not intended to (and cannot) be used by anyone to avoid IRS penalties. This document supports the promotion and marketing of insurance and other financial products and services. You should seek advice based on your particular circumstances from an independent tax advisor.
MetLife, its agents and representatives may not give legal or tax advice. Any discussion of taxes herein or related to this document is for general information purposes only and does not purport to be complete or cover every situation. Tax law is subject to interpretation and change. Tax results and the appropriateness of any product for any specific taxpayer may vary depending on the facts and circumstances. Your clients should consult with and rely on their own independent legal and tax advisors regarding their particular set of facts and circumstances.
Metropolitan Life Insurance Company, 200 Park Avenue, New York, NY 10166. Securities products offered by MetLife Securities, Inc. and New England Securities Corporation (members FINRA/SIPC), both at 1095 Avenue of the Americas, New York, NY 10036. Some health insurance products offered by unaffiliated insurers through the Enterprise General Insurance Agency Inc.(EGA), 300 Davidson Avenue Somerset, NJ 08873-4175. All are MetLife companies.