Question 1

What is an annuity, and how does it provide income?

Accepted Answer

An annuity is a contract with an insurance company that converts a lump sum into regular payments—either immediately or later—to provide steady income during your later years.

Question 2

Can I take money out of an annuity early?

Accepted Answer

Many annuities have surrender charges or penalties for early withdrawals. Always check the contract for details, but many include penalty free amounts such as 10% yearly of the balance.

Question 3

Why keep life insurance during retirement?

Accepted Answer

Life insurance can cover final expenses, support a spouse or dependents, or reduce the financial burden on heirs. It may also help achieve certain legacy goals.

Question 4

What types of life insurance work well later in life?

Accepted Answer

Options include term life, whole life with cash value, and universal life with flexible premiums. Your choice depends on your needs, health, and budget.

Question 5

How do life insurance premiums change with age?

Accepted Answer

Premiums usually increase as you get older or if your health changes. Obtaining coverage earlier can often lower costs.

Question 6

What is a reverse mortgage, and how is it different from a regular mortgage?

Accepted Answer

A reverse mortgage allows homeowners, usually 62 or older, to convert home equity into funds while continuing to live in their home. Monthly principal payments aren’t required as long as property obligations are met.

Question 7

What costs come with a reverse mortgage?

Accepted Answer

Costs may include origination fees, mortgage insurance, closing costs, appraisal fees, and accumulating interest.

Question 8

Will a reverse mortgage ever leave me owing more than my home is worth?

Accepted Answer

Many reverse mortgages are non-recourse loans, meaning you or your heirs won’t owe more than the home’s value when the loan becomes due.

Question 9

How much can I borrow with a reverse mortgage?

Accepted Answer

The amount depends on your age, home equity, interest rates, and program limits. Generally, older borrowers with more equity can access more funds.

Question 10

Are there protections before obtaining a reverse mortgage?

Accepted Answer

Yes, many jurisdictions require counseling by an approved third party to explain costs, alternatives, benefits, and obligations.

Question 11

When can I claim Social Security benefits?

Accepted Answer

You can begin receiving benefits at age 62, though waiting until full retirement age or later increases your monthly payment.

Question 12

Can I make extra contributions if I’m behind on retirement accounts?

Accepted Answer

People age 50 and older can make “catch-up” contributions to certain retirement accounts, increasing the total saved each year.

Question 13

Are withdrawals from retirement accounts taxed?

Accepted Answer

Withdrawals from traditional accounts are generally taxed as income. Roth accounts may allow tax-free withdrawals if certain conditions are met.

Question 14

What sources of guaranteed income do you already have?

Accepted Answer

Guaranteed sources of income in retirement may include pensions, annuities, Social Security, or other investment vehicles designed to provide a regular income stream. When planning for retirement, it's important to take stock of these guaranteed income sources to understand how they contribute to your overall financial security and ensure you're prepared for retirement.

Question 15

How much do you already have saved for retirement?

Accepted Answer

Knowing how much you've saved for retirement is an essential aspect of planning for your future. It's crucial to understand your current savings and investments as they play a pivotal role in achieving your retirement goals. This can encompass various accounts, such as 401(k)s, IRAs, or other personal investments that serve as a foundation for your retirement planning.

Question 16

Have you discussed your concerns with a financial professional?

Accepted Answer

Discussing your retirement concerns with a financial professional is a critical step in creating a robust and personalized plan for your future. Engaging with a financial advisor ensures that your worries, aspirations, and specific financial goals are thoroughly addressed. Through these discussions, you gain tailored advice and strategies, providing you with the confidence needed to make informed decisions about your retirement.

Question 17

Do I have enough money and how long will it last?

Accepted Answer

Ensuring financial security in retirement is a common concern. Determining whether you have enough savings and how long they will last can be daunting. Consulting with a financial professional can provide clarity on these important aspects. By assessing your current finances and future financial goals, a financial professional can help develop a comprehensive plan, offering strategies to sustain your retirement funds for the duration you need.

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