04-25-2019 Columns

Fixed annuity could help extend lifespan of retirement accounts It’s almost impossible to save too much for retirement. After all, you could spend two, or even three, decades as a retiree. And retirement is not cheap – even if you maintain a relatively modest lifestyle, some of your expenses, especially those involving health care, may continue to rise over the years. Consequently, you will need several sources of reliable income – one of which might be a fixed annuity. Fixed annuities are essentially contracts between investors and insurance companies. When you purchase a fixed annuity, the insurer will guarantee the principal and a minimum rate of interest. This means the money you invest in a fixed annuity is designed never to drop in value. (However, this guarantee is based on the claims-paying ability of the insurer that issues the annuity.) You can structure a fixed annuity to pay you for a certain number of years or for your entire lifetime, which is the route many people choose. This is advantageous not only because of what it provides you – income for life – but because it also may allow you to take out less money each year from your other retirement accounts. Here’s some background: Once you turn 70-1/2, you are required to begin taking withdrawals from your traditional IRA and your 401(k) or similar employer-sponsored retirement plan. (This requirement does not apply to Roth IRAs.) You must take out a minimum amount, based on your age and account balance, but you are free to exceed that amount each year. But the more you withdraw from these accounts, the faster they are likely to be depleted. So, when you reach retirement, it’s a good idea to establish an appropriate annual withdrawal rate, based on your retirement plan balances, Social Security, lifestyle, longevity expectations and other factors. You may want to work with a financial professional to determine a withdrawal rate that’s suitable for your needs. If you can count on the income from a fixed annuity, you might be able to take out less each year from your traditional IRA and 401(k), giving these accounts more tax-deferred growth opportunities. Plus, if you don’t withdraw all the money from these accounts during your lifetime, you can include the remainder in your estate plans. A fixed annuity’s potential to help you extend the lifespan of your IRA and 401(k) can clearly be of value to you. Still, a fixed annuity does carry some issues about which you should be aware, such as surrender charges for early withdrawals, along with other fees. Also, if you take withdrawals before you reach 59-1/2, you likely will face a 10% penalty. And annuities can have tax implications, so before you start taking withdrawals, you will want to consult your tax advisor. Is a fixed annuity appropriate for you? There’s really no one correct answer because everyone’s situation is different. However, if you consistently max out your IRA and 401(k) contributions, and you still have money left to invest for retirement, you might want to think about an annuity. An income stream you can’t outlive – and that may help you protect your other retirement accounts – is worth considering. Edward Jones is a licensed insurance producer in all states and Washington, D.C., through Edward D. Jones & Co. This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Addressing the psych worker shortage I recently had the opportunity to meet with constituents from the Berrien County Health Department while they were in Lansing for their legislative advocacy day. The health department employees gave me an overview of the services provided by our local county health department, and we spoke about ways that the State can support the departments at a local level. I also had the opportunity to talk with them about issues that were brought to my attention by constituents. I received several emails from constituents asking about the availability of psych workers in Berrien County. Many of them said they had to travel to Kalamazoo to receive the care they need. The county health department employees stated that Berrien County is designated a mental health professional shortage area and that any legislation to increase the number of practicing professionals would be welcomed. Last week, I joined my colleagues in passing HB 4156. This bill would allow certain retired mental health professionals to come back to work with the Department of Health and Human Services without forfeiting their pension benefits. The state already allows retired psychiatrists to continue to keep their pensions during reemployment with the state. This bill will extend this opportunity to other mental health care professionals to combat severe shortages in such roles. This legislation isn’t a cure-all bill that will address every problem facing our county, but I believe it is a significant first step in the right direction. I understand that this office belongs to the hard-working people of Southwest Michigan, and I am always eager to hear your feedback. If I can ever be of assistance to you, you can reach me via email at PaulineWendzel@house.mi.gov, or by phone at 517-373-1403. You can also follow my Facebook page at @RepWendzel or visit my website at www.repwendzel.com.

Congrats to the 2019 #SWMISpirit tournament champions The 2019 #SWMISpirit tournament has concluded, and I would like to congratulate students, parents, faculty and alumni of the Coloma Comets on their back-to-back tournament championship. The Comets defeated Howardsville Christian in the final round, which concluded April 19. The champions tallied 3,920 in the finals, earning them the title trophy and a $250 prize from AT&T Pioneers for the accomplishment.