No one knows how long he or she will live. Death is a mystery.

The hardest part of retirement planning is calculating how many years we are going to live after we retire. As human beings, we don’t know how long the thread of our lives will be. It might be tomorrow or it might be more than 100 years. Still, we want to ensure that we will have enough money to last throughout our retirement.

What happens if we don’t? At best we become a burden to those we love in every way imaginable.

Most people who plan their retirement don’t assume that they were going to live until they are 100 years old. But more and more, that is the beautiful gift we’re given. So when you plan to retire at the retirement age of 65, you must raise enough money to provide for your needs for 35 years.

Some Americans between the ages of 45 to 70 are preparing for their retirement, but many of them haven’t thought about the circumstances when their savings run out and they are still alive. According to an online survey of the Society of Actuaries, they just don’t have a plan B.

Though, it is not easy to save and to raise money that will provide your needs all throughout your life, there are ways to make your finances last.

Social Security and Pensions

One way to ensure that you can have finances for your lifetime is through Social Security. The Social Security system will provide you income for your lifetime, but the amount of the money you receive depends partly on the year of your life in which you claim it. The longer you delay claiming it, the more you will receive. The best idea is to wait as long as you can, claiming your money only when you really need it. A second guaranteed way you can have a source of income for your lifetime is through a traditional pension. But only a few people are lucky enough to have this. If your company is offering you a traditional pension, take advantage of it. You will benefit from it for the rest of your life.

Another way you can secure financing for your retirement period is through annuities. These are designed to meet your retirement goals. Some workers invest 20 percent of their income and others invest huge amounts to get a higher security payment.

Medicare supplemental policies or Medicaid are helpful for your medical expenses. These are insurance policies that will pay your health expenses that your savings can’t cover. Let’s face it, when we grow old, there’s a fat chance that we will become sickly. Better invest in medical insurance than spend all your retirement savings on your medical expenses. It is also better to secure yourself with long-term care insurance because we don’t know how long you would need medical attention. Medicare would only cover 100 days of your medical expenses and after that you have to pay on your own.

Secure yourself for the long run. Be prepared and take action now.

Understanding Annuities

Peace of mind for yourself is something you would like when you reach that stage in your life when you are already old and in your retirement years. Preparing yourself for any unforeseen events that could happen, the important thing you should do is to find ways where you will not worry about anything when it arises.

Prior to your retirement, when you are still working hard to earn that money that you might have now, you should always think how your money will grow so that it will earn income or profit that you can use to be financially secure in the future. There are a lot of options you can choose before you decide where to put your hard-earned money in the right place and time. And if you want to invest, make sure that you know and always make the right decision.

One kind of investment that will surely protect you and your family is by investing in an annuity. What does an annuity mean? It is an investment and at the same time it is an insurance policy in one package. There is a form of agreement between you and the insurance company. You will give them your money to handle, then in return they will give you their policy indicating the benefits you will receive from them.

If you have already invested your money in an annuity, there are terms of payment you can choose either for your life only or for joint agreement. It is up to you which term suits you. You should also be aware that in an annuity, there are further fees that may be charged. Your monthly contribution to an annuity earns interest which is compounded monthly. And in case your investment result is to a gain or loss, it is tax-deferred, which is not reported in your income tax return.

There are two types of annuity. It may be either an immediate or deferred annuity. In an immediate annuity, when you invest your money it is guaranteed that the income lasts through your lifetime. With a deferred annuity, the money you invest grows tax-deferred until a particular time that is stated in the insurance policy. It can be either a fixed or a variable annuity.

In the event of death, the person who inherits the annuity is the one who will pay the income tax on any gain from this investment.