By Danny Smith

Remember back in the 1960s when folk rock was big? One of my favorite tunes from that era is Pete Seeger’s “Turn! Turn! Turn!”  He was inspired to write it after reading passages from the Old Testament.

According to Pete, he came up with the melody in about 15 minutes, then added the slightly altered biblical words and recorded it. The rest is history. The Byrds covered Seeger’s version, making it the group’s second number one hit. (“Mr. Tambourine Man” was their first.)

The tune lyrically speaks to the fact that to everything there is a season. I believe that life’s lessons prove those words to be true. I further believe that when it comes to planning for a successful retirement, there is a time to take risk and a time to take risk off the table.

What do You Need, What’s Guaranteed?

When people engage me as their advisor, after helping them estimate how much income they will need to retire, one of the first questions I ask is, “How much of that income do you want guaranteed?” The answer is usually, “Well, all of it, or as much as we possibly can.”  

One way to do this is to allocate a portion of your retirement assets to a certain type of annuity contract called a Single Premium Immediate Annuity, or SPIA for short. SPIAs are issued by insurance companies and are designed for people with a guaranteed income objective for a certain number of years or for the remainder of their life, or joint-lives in the case of couples.

Some SPIAs have an inflation option that increases the annual payout every year. With this option, payments in the early years of the SPIA will be less than they would have been without the inflation option, but go up every year over the selected payout period.