The National Association for Variable Annuities (NAVA) said that four “food groups” of retirement planning include:
- Guaranteed income. While retirement plans have typically centered on Social Security benefits and company-sponsored pensions to provide guaranteed retirement income, the decline of these retirement vehicles suggests that workers now consider an annuity as a potential source of guaranteed retirement income.
- Long term assets . Long-term assets should include equity in a private residence, 401(k) and 403(b) plans and IRAs, as well as deferred annuities
- Insurance. Many Americans underestimate the need for health and long-term care insurance in retirement, many retirees will require increasingly expensive long-term care during their retirement, which if not planned for can quickly wipe out savings, investments and other assets.
- Investments – Savings and investments should be used to provide for discretionary spending, including travel and luxuries, during retirement. Basic income needs can be ensured by guaranteed income products.
“For many, planning for a secure retirement can be a complex and daunting task in a volatile financial world,” said Mark Mackey, president and CEO of NAVA. “Our goal is that by offering a simple analogy, we might encourage more Americans to take the time, on their own or with the help of a financial professional, to begin the very serious process of planning for their financial retirement security.”