Why is Retirement Planning Hard?

Retirees are likely to run out of money.

By Ivon T Hughes
why is retirement planning hard
Figure 1. Retirement

When it comes to retirement planning, there is good news and bad news

According to government statistics, the life expectancy of average Canadians has increased almost one-quarter of a century in the past half of a century. That's the good news! With good healthcare and a sensible lifestyle, it's likely that you'll live a long time.

Longevity risk -- or the fact that it's just about impossible to plan for expenses two, three, or even four decades from today -- makes it difficult to plan for retirement. Who can predict the cost of housing, utilities, or even food so far in the future? How can you ever be certain that you won't outlive your hard-earned savings if you live to 85, 95, or 105? The biggest problem is that retirees are likely to run out of money when they are older and less able to do anything about it.

Wait, there's more good news. You can relieve this uncertainty by using a retirement annuity to plan for your comfortable retirement.

How Annuities Eliminate Longevity Risks

None of us knows how long we will live. It's safe to say that a good percentage of you will still be enjoying productive and comfortable lives decades after you retire. You can travel, enjoy your grandchildren, and travel around the country or even around the world.

That is, you can enjoy your life if you can eliminate your longevity risk.

How can you plan if you don't have a crystal ball that will tell you what the stock market, savings accounts, or even real estate and other assets will be like in 20 or 30 years?

This is exactly how a retirement annuity solves the problem of longevity risk:

  • You give a life insurance company one fixed sum of money.
  • In return, the life insurance company will guarantee you a fixed rate of return that provides you with a guaranteed, lifetime income.
  • Why consider a retirement annuity over other retirement financial solutions?

    1. Look, you might get lucky and make a lot of money in the stock market, but you won't have to count on luck with retirement annuities.
    2. These days, returns from other safe financial products like savings accounts and even GICs don't even keep up with inflation.

    When you decide to stop working, let your money start to work for you. You can count upon a retirement annuity to offer you the peace of mind of a predictable, lifetime income from your hard-earned savings.

    Ivon T Hughes
Ivon T Hughes

About the Author

Ivon T. Hughes

Ivon T Hughes is a leading expert in life annuities in Canada. His website LifeAnnuities.com is a recognized authority on annuities. He's also an established insurance and investment broker, through The Hughes Trustco Group since 1972. Recently, he's been redefining how annuities are sold in Canada.

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