Have you thought about how much savings you need to retire?

Written by Emma Hoffman

People are living longer: As you consider your retirement, it’s important to recognize that the entire U.S. population is older today than it has ever been.

Aging is more expensive: At the same time, the cost of aging is going up in America. An older couple in good health needed $50,016 a year to meet basic needs in 2023. Whereas the average annual Social Security Old-Age benefits were $21,902 in 2022.  That’s why it is increasingly important that people have access to reliable retirement income options.

Annuities stand out as a savings tool: They help supplement Social Security and provide more certainty in retirement.

What exactly are annuities? An annuity is a contract between you and an insurance company designed to ensure you won’t outlive your savings, a concern many retirees face. In exchange for premiums paid, the insurance company agrees to make a series of income payments to you.

How they work: This arrangement allows you to accumulate funds on a tax-deferred basis and build a safety net in the form of guaranteed lifetime income. Annuities provide income regardless of market fluctuations or economic uncertainties, ensuring that retirees can maintain their expenses and quality of life through retirement.

Everyone’s retirement needs are different. Ever consider how much savings and income you would need to live the life you want in retirement? This calculator from NerdWallet is a great place to start.

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