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How to Not Run out of Money in Retirement. Worried about outliving your savings? Consider
investing in a fixed annuity so you'll have guaranteed income for life. Here's how it
works. You will need Fixed annuity and financial advisor. Step 1. Understand what you're working
for; ensuring adequate lifetime income is a primary reason you save for retirement.
The goal of saving for retirement isn't just to build wealth -- it's to replace the income
you earned when you were working. Step 2. Consider investing in a fixed annuity; it
guarantees you a specific amount of retirement income so you can cover basic expenses when
you stop working, and it won't run out no matter how long you live. Unlike the stock
market, real estate, or other potentially risky ventures, a fixed annuity is guaranteed
by an insurance company, can't be lost, and provides a minimum of amount of interest.
Step 3. If you want the potential for higher returns than a fixed annuity offers and are
willing to assume some risk, consider a low-cost variable annuity. Payouts fluctuate because
they're tied to how the markets perform. Many annuities include the option to provide lifetime
income to your spouse or other beneficiary after your death. Step 4. Consider contributing
to an annuity while you're still working, as opposed to purchasing one when you retire.
A low-cost annuity can be a valuable part of a diversified retirement portfolio. It's
a guaranteed asset that can help minimize volatility and improve overall returns over
time. Step 5. Remember that one size doesn't fit all when it comes to retirement strategies.
Discuss your needs and goals with an objective financial advisor, and then create a customized
plan that has the right mix of investments for you. Did you know The average monthly
Social Security payment for retired workers as of July 2009 was $1,160, while the average
monthly spending for individuals age 65 and older was $3,044.