There is an estimated 7 million Americans set to reach the age of the 65 by January 1st 2013, and majority will be thinking about retiring. Even if a deal is reached and the fiscal cliff is avoided, it still may be a rough time to call it a career. With uncertainty surrounding taxes, cuts to spending, market performance, and health care costs it could be difficult to make the move into retirement in the next 12 months. According to Jason Wheeler, CEO of Pathfinder Wealth Consulting, “It’s kind of a perfect storm in 2013 when you think about it.” Wheeler is referring to the combination of the number of seniors who will enter retirement or lose their jobs in the coming year and all of the uncertainty swirling around.

John O. McManus, CEO of McManus & Associates, a trust estates law firm, said “Many seniors may want to postpone retirement in 2013 because they just don’t know what their tax rates will be…..If the markets don’t perform well and tax rates go higher, seniors will have a lot less money to spend.”

“The vast majority of people don’t have the money to retire,” said financial planner Bill Losey, president of Bill Losey Retirement Solutions. It is already easy to notice that the costs of essentials (food, clothing, utilities, gas, etc.) are increasing while salaries remain low. Losey warns, “seniors will feel the pinch if they retire next year.”

Inflation hurts many seniors since they had looked to fixed income investments like bonds for retirement income and with rates low the squeeze is felt more significantly. According to Chris DeGrace, first vice president for private wealth management at SunTrust Investment Services, “Given how low interest rates are and will be for the next few year with what the Federal Reserve is doing, it’s going to be hard for seniors to generate needed income,” and “there will be more stress on them to find other types of guaranteed income streams.”

Many Americans approaching retirement find that by utilizing an alternative product like an equity or fixed indexed annuity they can hedge their retirement portfolio against factors like inflation and plan for increased tax rates. To learn more about annuities and how they fit into a retirement plan visit the Annuity Think Tank.

To read the entire article by Mark Koba, click here.

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