The biggest fear retirees have is that they'll run out of money. But if you plan your finances well and take a couple of simple steps, you can ensure that your money will last your entire lifetime.
In the following segment from their video guide to investment planning, Motley Fool director of investment planning Dan Caplinger talks with Fool markets/IP bureau chief Mike Klesta about how you can protect yourself from having your money run out in retirement. Dan notes that Social Security is a key element for most retirees, but that most companies have cut back or eliminated employee pensions that supplemented retirement income. General Motors (NYSE:GM) froze its pension plan for some white-collar workers back in 2012, while Bank of America (NYSE:BAC) made a similar move, choosing instead to boost 401(k) matching contributions on their employees' behalf. General Electric (NYSE:GE) and 3M (NYSE:MMM) have also closed their pension plans to new hires in recent years. Dan notes, however, that immediate annuities allow retirees to convert lump-sum savings into monthly income, with options to make that money last the rest of their lives and even rise with the cost of living. Dan concludes that a combination of different types of savings is the best way to ensure you'll have the money you need when you need it.
Make the most of Social Security
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Dan Caplinger owns warrants on Bank of America. The Motley Fool recommends 3M, Bank of America, and General Motors and owns shares of Bank of America and General Electric Company. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.