How to Survive a Changing Retirement Landscape

How to Survive a Changing Retirement Landscape

There’s no disputing the fact that retirement has changed over the years.

Generations ago, you could expect to work for the same company for 40 years and retire with a pension plan that would provide adequate income for the remainder of your life, however long that might be.

Today, the responsibility for saving for retirement has shifted away from employers to individuals; that is, from traditional pension plans to defined contribution plans, such as 401(k) plans.

Burgeoning health care costs

This transition has not been seamless. Many of today’s retirees simply haven’t saved enough. And at the same time, retirement is becoming more expensive.

Health care costs, for example, accounted for 17 percent of gross domestic product in 2010, and are expected to account for 20 percent by 2017, according to the U.S. Department of Health and Human Services.

That affects retirement goals. According to a recent study by the Center for Retirement Research at Boston College, an average, healthy, 65-year-old couple will need $260,000 to pay for health and long-term care costs for the remainder of their lives.

Longer lifespans

As well, people are living longer and will be retired for longer. In 1980, the average life expectancy for a 65 year old male was 79.1 years. In 2010, it was 82.73, according to National Vital Statistics Reports.

The good news: This situation has created opportunities for financial services companies to develop products to help address the needs of a changing retirement. One such product is the annuity, which offers guaranteed income during retirement, and is unique among financial products. Indeed, only Social Security or a defined benefit pension plan can offer the guaranteed income stream that is characteristic of an annuity.

If you are starting to think retirement, you may want to consider whether an annuity is right for you and discuss the pros and cons with your advisor.

Annuities Offer Unique Benefits and a Rich History

Annuities are the only financial products – other than Social Security and defined benefit pension plans – that can guarantee you a stream of income throughout your retirement. Yet many investors are still wary of them. The fact is, annuities have been around for a long time and are likely to be here for some time to come. Here’s a brief history of annuities.

1759: The first U.S. annuity is offered by a Pennsylvania company to Presbyterian ministers and their families.

1912: The first U.S. annuity is offered to the general public by the Pennsylvania Company for Insurance on Lives and Granting Annuities.

1930: Programs under the New Deal begin encouraging individuals to save for their own retirement, increasing interest in annuities.

1980: The guaranteed minimum death benefit – a minimum amount payable on death, provided all premiums have been paid – is introduced.

1982: Annuities are allowed to keep their valuable tax-deferred status under the Tax Equity and Fiscal Responsibility Act.

1995: Annuity sales exceed $100 billion.

1997: In response to skyrocketing annuity sales, annuity assets exceed $1 trillion.

2006: Annuities are allowed to include long-term care riders under the Pension Protection Act of 2006.

2010: In just a little over 10 years, annuity assets double, exceeding $2 trillion.

2012: Annuity sales exceed levels seen before the financial crisis.

Recipe: Coconut Curry with Fall Vegetables

1 tablespoon vegetable oil

  • 1 clove garlic, finely chopped
  • 1 small onion, finely chopped
  • 1 inch piece fresh ginger, peeled and minced
  • 1 tablespoon ground turmeric
  • 1 tablespoon mild curry powder
  • 3 cups bite-sized fall vegetables (broccoli, cauliflower, squash, etc.)
  • 1 can coconut milk
  • 2 cups water
  • 1/3 cup roughly chopped fresh cilantro
  • Salt and pepper to taste
  • Dried chili flakes to taste (optional)


Heat oil in a medium-sized pot. Add garlic, onion, ginger, turmeric and curry. Cook until soft. Add veggies. Stir until they’re slightly cooked and beginning to turn brown.

Add coconut milk and water, mix and bring to a boil. Reduce heat and simmer 20 minutes.

Season with salt, pepper and chili flakes. Sprinkle with cilantro before serving over steamed rice.