Planning for retirement today can feel more confusing than it used to. You may have seen headlines saying, “Social Security benefits are running out,” or “Pensions are becoming a thing of the past.” While there’s more to these stories than the headlines suggest, it’s understandable to feel uncertain when your financial future is on the line.
The truth is, Social Security isn’t disappearing as long as you continue paying into the system. By 2033, benefits may be reduced by 23% if Congress doesn’t act to reinforce the Social Security Old-Age and Survivors Insurance (OASI) Trust Fund.1 That reduction could represent a risk to retirees who count on those benefits.
Many people no longer have access to employer sponsor pensions and may feel that the responsibility for creating reliable retirement income falls on them. And with people living longer, prices rising and markets fluctuating, relying on just one source of income might not be enough to cover your future needs.
The good news: you have choices—and those choices can help you feel more confident about your goals.
Exploring ways to add income in retirement
When it comes to planning your retirement income during retirement, it’s important to understand your options. Each one works differently and comes with its own pros and cons:
- Social Security will provide income for nearly every U.S. worker. These benefits are adjusted for the cost of living, but they may not cover everything. Even with yearly increases, your income might fall short when it comes to big expenses like health care, housing and surprise costs. That’s why many people look for other ways to add steady, flexible income.
- Employer plans and individual retirement accounts (IRAs) can help you grow your savings over time before retirement, but they don’t guarantee income for life.
- Certificates of deposit (CDs) are insured and low-risk, but their returns may not keep up with rising costs.
- Annuities offer ways to create guaranteed income, and some types—like indexed annuities—provide opportunities to grow your money based on market performance, but without direct market investment.
Why annuities are worth a closer look
Annuities can offer more than just guaranteed income in retirement. They can also help protect the savings you’ve worked hard for and give it opportunities to grow and potentially keep up with rising costs. Some annuities also offer the flexibility to choose options that match your comfort level—whether you’re focused on protecting your savings, growing your money, or a mix of both.
Finding confidence in uncertain times
It’s normal to feel unsure about the future—especially when the news focuses more on retirement risks than solutions. But building a retirement plan with different sources of income can help you feel more confident.
A financial professional can help you find retirement options that fit your goals. By learning about the tools available, you can make informed choices today that help you feel more prepared for tomorrow.
Additional reading:
What to bring to your first meeting with a financial professional
