Financial Fitness Using The Retirement Pyramid (NAPSA)—What do food and financial fitness have in common? The answer is a pyramid that can help you visualize just how to balancefinancialpriorities. While no two people will have exactly the same retirement plan, using a financial fitness pyramid can give you anideaof how to balance your investments. When presented with the food pyramid developed by the U.S. Department of Agriculture, most Insured Retirement Institute A financial fitness pyramid can help you visualize how to allocate savings and investments for people understand which choices your later years. remain healthy. well. As 401(k)s and IRAs offer a can ensure that their bodies Drawing on that recognition, the Insured Retirement Institute (IRI) recently developedits Retire- wide selection of investments, they also provide some stability against the frequent fluctuations ment Pyramid—a visually simple that can affect a company’s single but powerful tool that financial investment decisions to their stock. Insuranceis critical, too. While the bulk of your asset base should cial future. insurance with long-term care, advisers can use to help explain clients. Once they have visualized not be overly invested in this group, the plan, they work together to investors should not ignore the produce a healthy and vital finan- importanceof a good mixtureoflife Makingupthelarge base of the pyramid are guaranteed income streams, such as annuities, which have continued to grow in popu- larity during the economic down- turn. President Barack Obama recently touted annuities as vehi- cles to reduce concerns that “re- tirees will outlive their savings.” And as the certainty of Social Security may seem tenuous to younger investors, annuities may prove valuable alternatives. Onthe next level of the pyra- mid are longer-term investments that need time to mature and grow. Examples include tradi- tional 401(k)s, IRAs, real estate holdings and some annuities as medical coverage and Medicare. At the top of the Retirement Pyramid are CDs, mutual funds, stocks and bonds. With the wild swingof the stock market over the past two years, advisers may want to dilute some of these more volatile investments with some- thing more stable, such as IRAs, and more guaranteed income streams, such as annuities. A smattering of these in your retire- mentplanis a wise choice. A healthy financial diet will include all four basic groups— guaranteed income, long-term assets, insurance and investments. For more information, visit www.[RIonline.org.
