Americans have a variety of choices for their retirement planning, and most workers seek stable retirement income that won’t run out before they pass away. Unfortunately, the choices can be confusing for many who aren’t trained in the nuances of finances.

But, how can you create a plan that will help ensure a financially secure retirement? Here’s a guide to building a stable and workable retirement income system.

Contribute to Traditional Retirement Plans

For most workers today, a traditional retirement plan is either a 401(k) plan or an Individual Retirement Arrangement (IRA). Few employees generally have access to a pension any more. But if you do have any of these retirement accounts, you do well to contribute to them first. Why?

A guaranteed pension through a reliable pension system is an easy way to plan, and it’s often mandatory. 401(k) plans often provide a matching contribution from employers, so you should at least contribute enough to accumulate that company match. It’s essentially free money, so this is a way to boost your overall retirement contributions and eventual income.

The main concern with fixed dollar amount accounts like these is that you risk running out of money after a few years.  The best strategy, therefore, is to use these accounts first and then plan for longer-term sources of income after these have been drawn low.

Buy a Deferred Annuity

Among modern retirement planning methods, annuities provide the best source of stable income. An annuity is the closest retirement tool to a traditional pension that most people have today. It operates in a very similar manner. You contribute either a lump sum or a set of periodic payments, and when you retire you can receive a set amount of money on a monthly basis.

There are two types of annuities: deferred and immediate. If you’re planning for future retirement, a deferred annuity is perfect because it doesn’t begin immediately. Your contributions can appreciate and boost the monthly income received at retirement. And you can generally choose between a fixed dollar amount or an amount adjusted for interest or inflation.

Deferring the start of an annuity until after you use IRA or 401(k) assets means you can draw a larger amount each month based on actuarial tables. It also provides more security since annuities generally pay until death.

Care for a Spouse

When planning retirement withdrawals, don’t forget to investigate spousal options. You can often contribute to spousal IRAs, for instance, even if one spouse didn’t work (or worked less than the required amount). This includes the catch-up provisions for those over 50 years old.

Ask your annuity provider how spouses are provided for in their various annuity plans. You may want to purchase an annuity with joint and survivor benefits, continuing payments to the surviving spouse. These amounts are generally half or one-third of the original payments.

If you don’t opt for joint benefits, your surviving spouse (or other beneficiary) often can choose from a lump sum benefit, a recalculated payment for their lifetime, or a five year benefit withdrawal.

Reassess Regularly

To ensure the stability and viability of any retirement plan, you need to reassess it on a regular basis. Work with a financial planning professional to determine how your traditional retirement account investments are going, how secure your annuity provider is, and what the needs of your spouse are. You should conduct a personal audit about once per year for the best ongoing results.

At Advanced Pension Programs Inc, we specialize in helping people prepare for a more stable retirement. Call today to learn more about what we can offer you.