Improve Your Retirement Prospects with 3 Simple Steps


With life expectancy in the U.S. continuously increasing, many people need to plan for a retirement that could last upwards of 30 years. While the prospect might seem daunting, there are some steps that you can take to make your later years that much more secure.

Purchase Immediate Annuity

This insurance product that can be a nice addition to your regular pension, as the annuity provides you with either monthly or yearly payments from the time you buy it to, sometimes, as long as you live. It works by buying the annuity for a set amount of cash immediately, and in return you will receive steady payments for a set period, often 10 or 20 years or in some cases indefinitely. However, income annuities have a few downsides that have to be considered beforehand, as some can incur very high fees and there is always the possibility that the provider will default on its payments.

Delay Social Security

It can be tempting to activate your Social Security payment as soon as you retire, but delaying it for a few years will prove beneficial to you in the future. For each year you delay claiming your Social Security payments, you will get an increase of 8 percent on your monthly payments. If you can hold out for 3 years, your monthly payment will be increased by 24 percent, and that will last for the remainder of your years. Every additional year will add another 8 percent to that number.

Factor in Inflation

When you are planning for a period of several decades, the prudent thing is to factor in inflation. In addition to your Social Security payments which will go up with the cost of living, investing in some government issued bonds that are guaranteed to follow inflation is a wise move. There are also other assets that have proven to be able to keep up with inflation throughout the years, including real estate and stocks, however, there is no guarantee that they will continue to do so.


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