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Life insurance can become the main source of income in old age

The pandemic has taught us to be more careful about such undeniable values as life and health. An aging society affects all aspects of social and economic life of the state. Among other things, seniors form a growing group of consumers with specific needs and significant aggregate purchasing power, writes US News.
Life insurance can become the main source of income in old age

A pension in the United States consists of insurance and funded parts, the latter, as a rule, is much larger. Employees can deduct contributions from their own salary to their personal retirement accounts before tax. Employers can also contribute their funds there on similar conditions. The most popular funded retirement plan in America is 401 (k) (US Tax Code article number). The average retirement age is 62 years and average life expectancy is 79 years.

Every fifth American entirely relies on the 401 (k) plan, despite the fact that it is highly dependent on the financial market stability. Pension savings may be lost due to the crisis, as it happened in 2008. The experts believe that only retirement annuities (payment of remuneration or payment of part of the principal and interest on it) used in combination with other options, can guarantee stable income after retirement, the main being the Fixed Indexed Annuity (FIA).

The experts named the following five elements of sensible retirement savings: balance sheet, growth potential, stable income, fixed asset maintenance, and monthly payments.

Most Americans still do not trust the FIA, primarily because of its complexity, which, however, according to the IALC, is a myth.

The FIA ​​connects fixed payments with indexing so that income is not affected by market fluctuations. An indexed interest rate allows the accumulated amount to grow even after a person retires.

The experts are assuring that only diversified sources of accumulation will be able to provide comfortable “golden years”.

Source: https://health.usnews.com/health-care/for-better/articles/seniors-your-life-insurance-could-be-a-source-of-income

Photos are from open sources.  

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