“One, you can go overseas and you can probably get higher rates on your savings in some other countries. You could well lose that with currency fluctuations down the road. Another way some people are looking at is to buy an annuity and annuities are great. The problem with annuities can be companies that sell these annuities require a lock-up period of three or four or five years, during which you’re not going to get any income at all.”
The change from a projected five percent rate as recently as 2006 to one percent today means a shortfall in annual income for a retiree. What you do depends on when you retire.
“The longer the time period you have to work with before you retire, the easier it is to compensate for any individual year fluctuations. If you’re now retired or you’re going to retire in a year or two, then you don’t have a lot of room for errors. So, the more time you have, again, the more you can afford to make judgments that may or may not be correct in a single year, but over a large number of years the returns will average out and you’ll be okay.”
Behrmann stresses the importance of planning early, and often, throughout retirement, EO ensure that your plan reflects current market conditions and future income needs.