Saving For Retirement

Some people may feel a little guilty for having done well and prepared for their retirement. Often Christians feel this way due to a mistaken interpretation of 1 Timothy 6:10 about the “Love of money being the root of all evil”. However, there’s no need to feel this way. The Bible also says in Proverbs 10:22 “The blessing of the LORD, it maketh rich, and he addeth no sorrow with it.” A lot depends on the state of your heart and what you do with the blessings the Lord has given you. Remember, your prosperity can shared amongst friends and family that you value. If you have friends and family who are in need, you can give them a hand-up without putting yourself in the poorhouse. Here are a few ways that you can structure your assets to better save for retirement and help others as well.

Saving for Retirement with a Laddered Annuity

A laddered annuity is a financial arrangement that allows you to guarantee your income for the remainder of your life. Once that worry is relieved, you can feel free to give more away without worrying that you might outlive your assets and end up in the poor house. Using laddered Annuities, you secure your income through the use of a series of annuity insurance contracts. (Laddered simply means that there are several smaller individual contracts purchased over time rather than just one big annuity contract.) These contracts are called “immediate annuities” and pay you a guaranteed income for life in exchange for a lump sum of savings that you deposit with the insurance company. The disadvantage is that the lump sum of savings can never be recovered once it’s converted but instead is converted into a fixed income for the rest of your life. By creating a laddered annuity payment structure, you ensure that you never run out of income while preserving a large portion of your retirement savings. For more information see: Fixed Annuities vs. Permanent Life Insurance and Is a Retirement Annuity the Answer for your Retirement Savings? for more information.

It’s important to work with a financial professional when setting up this arrangement. The amount of money you convert must be just enough to meet your income needs. The remainder of your savings is invested so that after a certain period of time, your savings is replenished to the original dollar amount and you can convert more money for higher monthly payments. The “ladder” is the continued layering of income payments on top of each other. Eventually, you will end up with a fairly sizable income.

This gives you the flexibility and security to help other people who are important in your life without worrying about running out of money.

Long Term Care Insurance

Another concern as we get older is what will happen if we develop a terminal illness? Will we be able to cover our medical costs? Will we be a burden to our loved ones? Fortunately there is a way to cover this possibility as well and it is called “Long-Term Care insurance” by purchasing this type of policy we can eliminate that worry. After we have eliminated both of these concerns for providing for our retirement we can begin to provide for others.

Life-Insurance

One popular way to provide for others is to use life insurance that will provide either a lump-sum payment or an annuity payment to your loved ones to help provide for them after you are gone.

First-to-Die Life Insurance

One long-term strategy to help loved ones after you’re gone is to purchase a first-to-die life insurance policy. A first-to-die life insurance policy means that there are two people named on the policy. When the first person named on the policy dies, the insurance proceeds go to the second person. These policies are normally purchased in lieu of buying two life insurance policies and you’ll have to ask the life insurance company if they will allow this arrangement and you will need to compare costs and benefits carefully. Usually, if the other person is dependent on you for financial support, they will allow it. However, if they do not, you can always purchase an ordinary life insurance policy. This guarantees that money will be available after your death to whomever you think needs it most. The only reason to choose a first-to-die policy would be to recover your premium payments and collect the death benefit if your friend or family member passes away before you do.

Here are some other simple ways that you can help provide for others that are low cost as well.

Give Rides

Giving people rides is an easy way to help out loved ones. Create a carpooling arrangement. If you have several friends that need rides to family or to doctors appointments, help them out by giving them a ride to their destination. You don’t have to charge them anything, if you’re being generous, and they will probably appreciate the transportation, the caring and support of having you near. It is also a good time to be able to talk to them and share in their lives.

Offer Low-Cost or Free Rooms

Once you have an “empty-nest” you may have a spare bedroom in your home. If so, you can convert it into a guest bedroom. If someone you know is having difficulty making ends meet, this could be the ultimate act of generosity. You can give them a safe, warm, place to sleep at night. You’ll also get the benefit of companionship. Having your friend or a family member live with you can sometimes be stressful, so make sure that everyone can agree on the living conditions and any special needs that anyone has.

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