Why Guaranteed Income Should Be Part of Your 100-Year Life Plan
“These vehicles convert assets into irrevocable income streams insulated from market volatility,” Cummings said. “This is particularly critical as elder financial abuse accelerates, especially in Texas, where POA fraud is rampant. Clients over 70 with no trusted family members should consider annuitization to reduce discretion-based vulnerabilities.”
In other words, setting up one of these reliable income streams can protect seniors from having their money misused by someone they should be able to trust.
Mixing Income Sources Can Provide Stability
You’re probably well aware of the financial wisdom of spreading your investments across different asset types — but Cummings also wants you to consider the tax treatment of your income.
If you lean too heavily on traditional (or pre-tax) IRAs, you may experience sudden jumps in income later in life that could lead to higher Medicare premiums and taxes on your Social Security benefits. Cummings’ solution? Mix things up — but include guaranteed income in that mix.
“We often recommend a laddered blend of single-premium immediate annuity income, rental income, qualified dividends, and tax-free muni bond interest to smooth adjusted gross income and reduce IRS audit flags,” he said.
Essentially, this approach keeps your income more consistent and helps you avoid unnecessary tax complications or spikes that could draw extra attention from the IRS.
Make Sure Your Approach Keeps Up With the Cost of Living
For Cummings, fixed income that doesn’t rise with inflation isn’t enough to help seniors keep up with increasing costs of living.
“A $3,000 fixed monthly payout loses over 50% of its purchasing power in 25 years at 3% inflation,” he said.
People who expect to live past 85 — a demographic that’s expanding rapidly — need income that adjusts with inflation, such as annuities with cost-of-living adjustments or investments in Treasury Inflation-Protected Securities (TIPS).
Bottom Line
Living to age 100 or beyond sounds exciting — but it comes with challenges, especially when it comes to financial security. Integrating guaranteed sources of income into your 100-year life plan can help protect you from market volatility and from individuals who may take advantage of your trust.
You’ll want a strategy that avoids unexpected tax bills while ensuring your income keeps up with inflation.
Even if you never make it to 100, adopting a financial approach that can support your independence for decades is always a wise move.
This article is for informational purposes only and does not constitute financial advice. Investing involves risk, including the possible loss of principal. Always consider your individual circumstances and consult with a qualified financial advisor before making investment decisions.
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