Successful investing is largely about having a good plan and then giving the markets time to play out.
Focus: Your investment plan will evolve from one of growing your asset base to one of producing income for you – income for life.
Plan: This kind of reliable income stream is something you will need to design in conjunction with a professional financial planner. They can help design a plan that includes two important points: 1) How much you value a guaranteed income stream (see note below), and 2) How sensitive you are to changes in your investment portfolio.
Note: A guaranteed income stream is generally achieved through the purchase of annuity contracts. Annuities are long-term investments designed for retirement purposes. Withdrawals of taxable amounts are subject to income tax and, if taken prior to age 59½, a 10% federal tax penalty may apply. Early withdrawals may be subject to withdrawal charges. Optional riders are available at an additional cost. All guarantees are based on the claims paying ability of the insurer.
An annuity is a tax-deferred investment. Holding an annuity in an IRA or other qualified account offers no additional tax benefit. Therefore, an annuity should be used to fund an IRA or qualified plan for annuity features other than tax deferral. Product features and availability vary by state. Restrictions and limitations may apply.
Stay focused: It’s a matter of understanding your lifestyle and life situation. Your needs and wishes need to be clear upfront when meeting with your advisor, and need to stay focused as time goes on, so that your advisor can design and maintain an income program that works for your situation.