The 4 C's: A framework for your retirement strategy.


Comfort means being able to maintain your current lifestyle in retirement, and knowing that your income will last.

You're saving for retirement. Which is more appealing to you? The Allianz study found that most people prefer a guarantee.
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Allianz Life Insurance Company of North America, The Allianz Reclaiming the Future Study: One year later (Pulse Survey), 2011.
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When it comes to retirement planning, most of us have a simple goal: We want the comfort of not having to worry about money after we retire. That's why it's important to protect a portion of our savings - and to also have some income guarantees - throughout the three stages of retirement (saving or "accumulation," transitioning, and receiving retirement income).

While you're saving

While you're saving for retirement, it's important to consider risk. How comfortable are you with the idea of losing some money? Talk to your financial professional about your risk tolerance and about how it may affect your long-term goals.

Chart: Comfort in retirement - Safety over return.

During your transition into retirement

Many people are surprised to discover that they spend almost as much in retirement as they did when they were working. That's because every day is in effect a Saturday, and spending habits may shift toward leisure activities. For some retirees, this translates into a worry that they could face a "retirement income gap" and potentially run out of money. This is why it may be wise to include some lifetime income guarantees as part of your retirement strategy.

When you start receiving income

Market losses can be especially painful as you're getting ready to retire, because they can significantly reduce your income potential. And although it's tempting to think that you'll simply delay your retirement, this isn't always an option. These are just two of the reasons why some people may look to protect a greater portion of their retirement savings as they enter this critical transition phase.

Chart: Delaying retirement is not a back-up plan.

Understanding risk and reward

"The greater the risk, the greater the potential reward." You've probably heard this phrase, but did you know it isn't entirely accurate? That's because most of us equate the word "risk" with "losing money." But there are other types of risk, as well.

When planning for retirement, it's important to look beyond market risk and consider the risk of not achieving your financial goals. That's because lots of variables can affect your long-term financial strategy:

  • How much you save
  • How long you save
  • Your interest rate
  • How much you pay in fees and taxes

These are just a few of the reasons why many financial professionals may recommend placing a portion of your retirement savings in a financial product that offers you minimum guarantees.

Avoiding a retirement income gap

Simply put, a "retirement income gap" happens when your planned retirement expenses are greater than your financial resources. This can be a concern as you approach retirement because it could cause you to outlive your savings and run out of money. Fortunately, there are several strategies that can help you address this possibility.

Graphical representation of retirement income gap

Review your portfolio's asset allocations. Your financial professional can help you review the asset allocation strategy within your retirement portfolio to help make sure your money is working as efficiently for you as possible, while managing your investment risk.

Review your income and spending periodically. When you're transitioning into - or are already in - retirement, it's important to know whether your retirement income may be adequate to support your spending. Your financial professional can help you determine whether your current level of spending could put you at risk for a retirement income gap.

Clarify your needs and your wants. If there is evidence of a retirement income gap, your financial professional can help you find ways of addressing it. You might start by analyzing your spending and determining which expenses are critical and which are discretionary. Often, making just a few small changes in your spending today can have a big effect over time.

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