Retiring in the 21st century: what it takes

By Jason Kestler

Kestler Financial Group, Inc.


Retirement is changing in America.

A recent survey by the FINRA Investor Education Foundation found that these are the major sources of income of today’s retirees:

Source of Income% of Retirees Who Use This Source of
Income for Living Expenses
Social Security retirement payments 81%
Pension plan payments 63%
Withdrawals from savings 26%
Dividends or interest earnings on savings23%
Income from employment 17%


Notice that 63 percent of today’s retirees are counting on pension plan payments to cover their living expenses, but only 21 percent of today’s workers are covered by a traditional pension plan, and the percentage is dropping every year.

At the same time, Social Security is under tremendous financial pressure due to the impending retirement of the baby boomer generation. Thanks to the recession, 2010 is the first year in history that Social Security will pay more in benefits than it collects in taxes, and the Social Security Trust Fund is forecasted to be exhausted in just over 25 years.

Thus, it is clear that to have a financially secure retirement, today’s workers are going to need to save more on their own for retirement than did today’s retirees. As they enter retirement, they are going to need to figure out the best way to turn that retirement savings into a reliable retirement income.

Fixed annuities are a wonderful product for people to consider using. They are the only products that allow individuals to accumulate retirement savings, protect those savings from market losses, and turn those savings into a guaranteed income for life.