It is normal to want to enjoy your retirement years without undue financial stress. To achieve this goal, it’s necessary to preemptively implement strategies to maximize and safeguard your savings.
One effective way to enhance retirement income is by leveraging the Social Security “bridge” strategy, which involves delaying the start of your retirement benefits until the age of 70. This considerably increases the amount of Social Security income you will receive. This strategy also helps shield your retirement savings from potential fraudsters, as it converts accessible savings into a guaranteed monthly income backed by the federal government. Moreover, 401(k) plans help to protect retirement savings and assets because they are managed by fiduciaries that are legally obligated to act in your best interests.
An annuity can be an invaluable tool for generating a steady stream of retirement income. Annuities offer protection against investment losses resulting from market downturns or mistakes. Additionally, most annuities have limitations on withdrawing all your money at once, preventing catastrophic losses. To ensure a cost-effective annuity, it's essential to shop around or work with a knowledgeable professional who can guide you in making the right choice.
For people seeking to multiply retirement savings by investing, the available options are bonds, stocks, money market accounts, and certificates of deposit (CDs). A CD is a savings account that retains an agreed amount of money for a certain length of time to generate interest. These investment options have varying levels of risk.
Typically, the level of risk is directly proportional to the earnings potential. Equities, for example, offer bigger potential earnings while presenting greater long-term risks, whereas CDs carry almost no risk. People are naturally different in terms of how much they are willing to risk, so it’s important to get expert advice from financial experts to figure out your tolerance.
If you participate in a traditional pension plan or cash balance plan, choosing a guaranteed monthly pension payment can provide you with a reliable stream of income throughout your retirement. Even if your plan offers a lump sum cash-out option, opting for the monthly payment often results in higher retirement income over your lifetime. This decision not only safeguards you from potential fraud and exploitation but also protects against investment mistakes.
Financial institutions offer various tools and services to protect your retirement savings from exploitation and other types of loss. These include setting up alerts on your bank accounts to receive notifications for transactions exceeding a specified dollar amount or transfers outside of your designated geographic area. This allows you to quickly detect any suspicious activity and take appropriate action.
You can also opt for account lockdowns that require pre-approval for authorized withdrawals. Financial institutions will enforce additional security steps for any changes to your approved withdrawals, providing an extra layer of protection against unauthorized access. Some financial institutions offer services that allow trusted third parties to receive alerts after detecting potentially fraudulent transactions, enabling you to appoint a trustee who can help monitor your accounts and mitigate any potential threats.
