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Retirees can stretch their income by strategizing their payouts 2010-05-10 Many retirees have built sizable retirement nest eggs in the form of employer pension plans and investments. However, some worry that their income may run out over time, leaving them in a precarious financial situation. Most retirees choose to take their employer pension payouts in one lump sum, making it more likely that their hard-earned retirement savings will dry up, according to U.S. News and World Report. Older adults can reduce the risk of outliving their pension accounts by requesting to receive their benefits in lifetime payments, reports the website. Retirees can also invest a portion of their savings into an annuity, which will provide payments from the principal investment plus interest for the remainder of the investor's life. Annuities typically provide a more consistent source of income than other traditional forms of retirement investments, according to the Government Accountability Office. For example, a $100,000 annuity investment would provide a yearly payment of $6,480, as opposed to a $100,000 30-year bond investment, which would only offer $5,200 annually, the GAO reports. Building sufficient retirement income to cover bills and expenses is only one component of outliving savings. Retirees can make their money last by instituting saving and spending strategies.  |
