A new Prudential paper, “ Planning for Retirement: The Impact of Interest Rates On Retirement Income,” summarizes the latest NRRI research and references a case study to help illustrate the likelihood of the average retiree exhausting his or her retirement savings based on a number of scenarios, including a sustained low interest rate environment. In the absence of protecting retirement income, the likelihood of exhausting retirement assets increases dramatically when assets are exposed to an extended period of low interest rates.Specifically, the Prudential paper discusses the implications of its findings on individuals, including needs related to:
- Protecting retirement income against market, longevity, and interest rate risks through guaranteed lifetime income products.
- Optimizing Social Security, as it offers a stable source of retirement income that is not impacted by investment and longevity risks. Prudential’s white paper, “ Innovative Strategies to Help Maximize Social Security Benefits,” offers strategies to guide individuals in utilizing Social Security to help attain greater retirement security.
- Saving more in retirement plans and personal investment accounts, while meeting regularly with a financial professional, to help measure progress in terms of an actual retirement income goal.
- Helping employees do a better job of saving for retirement by enhancing defined contribution (DC) plans to help achieve more certain outcomes. This can be accomplished by adding features such as automatic enrollment, automatic escalation of contributions, and in-plan guaranteed lifetime income solutions.
- Encouraging employees to track their overall savings progress.
- Helping clients determine an appropriate target retirement age, track retirement savings and understand the role of guaranteed lifetime income products as well as Social Security.
- Educating clients on the impact of interest rates on different types of retirement income products.
- Ensuring clients understand that without a customized financial plan and proactive steps to insure their income, improvements in the economic climate alone will not be enough to ensure a secure retirement.
Annuity contracts contain exclusions, limitations, reductions of benefits and terms for keeping them in force. Your licensed financial professional can provide you with complete details.A variable annuity is a long-term investment designed for retirement purposes. Investment returns and the principal value of an investment will fluctuate so that an investor's units, when redeemed, may be worth more or less than the original investment. Withdrawals or surrenders may be subject to contingent deferred sales charges. Guarantees are backed by the claims-paying ability of the issuing company and do not apply to the underlying investment options. Your retirement income guarantees will be reduced if withdrawals in excess of the total annual income amount are taken. If an excess withdrawal reduces the account value to zero, no further amount would be payable and the contract terminates. Prudential Financial, Inc. (NYSE: PRU), a financial services leader, has operations in the United States, Asia, Europe, and Latin America. Prudential’s diverse and talented employees are committed to helping individual and institutional customers grow and protect their wealth through a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management. In the U.S., Prudential’s iconic Rock symbol has stood for strength, stability, expertise and innovation for more than a century. For more information, please visit http://www.news.prudential.com/. Retirement products and services are provided by Prudential Retirement Insurance and Annuity Company, Hartford, CT, or its affiliates. 0246406-00001-00