Preparing your retirement plan for the ‘Next Normal’

Grandfather hugging his granddaughter
Dylan Huang

Dylan Huang

SVP, Head of Retail Annuities

While we are still in the throes of a global pandemic, cities across America are slowly reopening recreation sites, businesses and, in some locations, preparing to return to work. Many of us are thinking about the ‘next normal’ and what that will mean for us. While it’s impossible to know what many aspects of our lives will look like, here are five questions individuals can ask themselves and their trusted financial professionals to ensure their retirement strategy can stay on track.

How will continued low interest rates impact my portfolio?

Protracted low interest rates affect consumers in a couple of ways. On one hand, it can benefit people borrowing money, but for most retirement savers, low rates can significantly impact retirement spending. When it comes to retirement savings, portfolios tend to be more heavily weighted to bonds over time to reduce risk, offer diversification and income. But, when fixed income investments are offering little to no yield, retirees can become limited in what they can spend or risk running out of money at some point. In this economic climate, investors saving for retirement should look for places to hold and grow their assets to meet their goals.

How can I position my finances to take advantage of a market recovery while staying in line with my risk tolerance?

Exposure to the financial markets is important for growth but just how much exposure will depend on your individual risk tolerance. Some solutions offer a certain amount of equity exposure and market upside while also ensuring there is a ‘floor’ to how much you can lose. During unpredictable times, investors may seek long-term retirement solutions that offer both growth potential and guarantees. One way to achieve these dual goals might be with a variable annuity and the purchase of an optional benefit, called an accumulation benefit rider, that would guarantee a minimum account value after a set period. This approach could give you the courage to invest during the vital period before retirement.


During unpredictable times, investors may seek long-term retirement solutions that offer both growth potential and guarantees."

Do I have enough protection in my portfolio?

At the same time investors define their plans to provide grow potential in their assets, they should also evaluate whether they have enough protection built in. Beyond traditional insurance policies, income annuities can be a source of guaranteed income. Serving as insurance within a portfolio, they can help investors feel confident that their basic needs in retirement will be met and that they’re adequately prepared for market volatility that may lie ahead.

How are my insurer[s] weathering COVID-19?

It is important to remember that an insurance policy is only as good as the company issuing it. During the current circumstances—when companies of all kinds are facing unprecedented financial pressures—many policy owners may be asking whether their insurer will be there for them now or at some point in the future. It’s worth exploring how the insurance companies who issued your policies are faring and what they are doing to ensure they can make good on their promises. An insurer’s credit rating is a widely used indicator of the financial strength and ability of an insurance company to meet its obligations. In addition to considering a company’s size and the riskiness of its assets and liabilities, you can also check its financial surplus.

What should I be doing right now if I am 5, 10 or 15 years away from retirement?

Whether you’re retiring soon or several years from now, you only get to retire once so having a strategy that can help you work towards the retirement you desire—and withstand unexpected events, like the ones we are currently navigating—is critical. The help of a trusted financial professional can offer the confidence of knowing that while you can’t predict the future, you can be prepared for whatever it might bring.

Partnering with an insurer with deep experience, a prudent approach to managing its assets, and demonstrable financial strength should provide confidence that any promises made to you today will still be kept tomorrow. 

Whether you are nearing retirement, or decades away and in need of some guidance developing a long-term strategy, New York Life is here to help.

There are fees, guidelines, limitations, restrictions and risks when considering an annuity purchase. Variable annuities are subject to market risk including possible loss of principal. Withdrawals or surrenders may be subject to ordinary income tax and, if made prior to age 59 ½, may be subject to a 10% IRS penalty. Guarantees are based on the claims-paying ability of the issuer. Your financial professional can provide costs and complete details.

Please consider the investment objectives, risks, charges and expenses carefully before investing in a variable annuity. The prospectus contains this and other important information and can be obtained from your financial professional. Be sure to read it carefully before investing.

Annuities are issued by New York Life Insurance and Annuity Corporation (NYLIAC) (a Delaware Corporation).  Variable annuities are offered by registered representatives of NYLIFE Securities LLC, member FINRA/SIPC, a licensed insurance agency. Both NYLIAC and NYLIFE Securities LLC are wholly owned subsidiaries of New York Life Insurance Company, 51 Madison Avenue, New York, NY 10010.