Income Calculators These tools can help you project how much income you might receive in later life.
For instance, Great-West Financial in Greenwood Village, Colo., recently introduced a service that enables participants in its 401(k) plans to calculate how much money they’re likely to get each month in retirement based on real-time account data and information about assets outside the plan. The tool then compares that result with the saver’s target and suggests ways of closing any gap.
In July, BlackRock, the world’s largest money manager, with $3.86 trillion in assets, launched what it calls the “CoRI” indexes to help consumers age 55 to 64 calculate how much they need to save to generate a specific lifetime income starting at age 65. A new calculator, based on that index, uses a few numbers to give retirement savers a quick take on where they stand.
Future Income With a GuaranteeDespite liability concerns (if an insurer should fail), some employers are going ahead with incorporating annuities and other lifetime-income options into their retirement plans because they see them as less risky from a legal standpoint than leaving their workers with inadequate savings.
Incorporating annuities into a retirement plan usually means that savers in the plan pay more in investment expenses, though advocates of the approach say savers are likely to pay less than they would if they bought such annuities on their own.
Future Income – and a Guarantee LaterSome savings plans are offering participants the option of buying an annuity at the point of, or after, retirement.
Financial Engines, for example, which provides retirement-plan investment advice and management, says it has signed up more than 70 companies, including Motorola Solutions, for its “Income Plus” program. That program’s goal is to provide steady retirement income using bond and equity funds, while letting investors set aside enough assets in bond funds to buy an annuity before age 85, if desired.This article originally appeared on MarketWatch. Glenn Ruffenach is News Editor at The Wall Street Journal, responsible for the Journal’s coverage of retirement finances and retirement planning.
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