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Protect Your Retirement Savings

  • Protect your retirement savings

    For the more than 70 million Baby Boomers approaching retirement, the road to their financial goals has become much cloudier than for previous generations.

    With benefits such as Social Security and employer pensions less certain, it is up to those approaching, or at, retirement, to choose the right strategy and information sources for making responsible decisions.

    "Boomers are living longer and more active lives and should consider taking greater responsibility for the protection of their retirement savings so they don't outlive their nest eggs," says Holly Burgess, VP, Strategy and Marketing Communications, Liberty Mutual. "It's important to create a safe retirement savings strategy customized to your needs." There are several things Boomers can do to help safeguard their retirement.

    Plan and Protect

    Focus on protecting your nest egg via conservative investments. Start by asking what "safety" means to you. Are you seeking to protect your principal from stock market volatility or looking for protection from taxation as you grow your assets? Is your top priority planning for the unforeseen, such as funds for future medical emergencies? According to the U.S. Department of Labor, almost 20 percent of retiree income will be spent on health care. Knowing this will help you decide where to invest the portion of your nest egg you aim to safeguard.

    Think Conservatively

    An easy rule of thumb is that you'll need to replace 70 to 90 percent of your pre-retirement income, say the experts at the Certified Financial Planner (CFP) Board of Standards.

    Your asset allocation may change over time, the CFP Board points out. As you age you may opt to limit exposure to riskier investments like stocks by investing more conservatively.

    Choose Safely

    For the portion of retirement savings you want to protect for near-term use, consider safer options. Many financial planners are advising older Americans to consider conservative alternatives like Certificates of Deposit, Fixed Income Funds and Fixed Deferred Annuities. Unlike more volatile investments, Fixed Deferred Annuities protect your principal while providing the opportunity to generate regular, periodic income. These products are offered by insurance companies and pay a fixed, guaranteed interest rate for an initial period. The rate may change later but cannot drop below a guaranteed minimum. Unlike many investments, interest earned on an annuity is tax deferred. Details about these types of products can be found on our Fixed Annuity page.

    It is important to consider an insurer's financial strength and to choose an annuity that allows you to customize it and access funds when you need them.

    Take Control

    "Don't sacrifice control over the design and price of the product you purchase. Pay for the features you need for your individual situation," says Mark McVeigh, SVP, Marketing and Distribution, Liberty Mutual.

    Lastly, understand any risks or sacrifices involved with each product.

    This article, originally titled "Baby Boomers: Protect Your Retirement Nest Egg," used courtesy of StatePoint media.

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    Life insurance and annuities issued by:
    Liberty Life Assurance Company of Boston, a Liberty Mutual company
    Home office: Boston, Mass. Service center: Dover, N.H.