Congratulations! You just retired and are ready to begin enjoying your life free from the responsibility of a full-time job. You will finally have all the time in the world to spend with your family and friends. This is an extremely exciting time, but it can also be a very financially scary time. Social security payments are not always enough to live off of. Many people who retired from Union or State jobs have some form of pension or 401k in place to supplement their income and that is amazing! This article is going to go over the different types of retirement accounts and what they all mean for you and your future.

1. 401k

A 401k is the typical retirement account that most people are familiar with. Many employers offer one as a benefit for working there with them. Many employers even offer matching contributions towards your retirement and that is basically free money! The idea is that over your time working you will contribute a little portion of your paycheck over to the retirement account and over time the money invested will grow as the stock market does and when you retire there will be a giant nest egg there ready for you to supplement your income with after retirement. One thing that many people do not know is what to do with their 401k to protect their assets.

2. Variable Accounts

Say you worked for the last 50 years and finally decided that now is the right time to hang it up. Great! You spent 50 years building up that 401k and it should be huge right now, right? 401ks fluctuate with the market and can go up and down as a result. There are no guarantees and there are no promises that you will not lose money. In 2008 many people wanted to retire and had the idea in their head that they spent all this time working and saving and when they went to check their account, they lost nearly half of the entire account, which was a realistic number in 2008. They can now either retire and potentially run out of money if they want to use their 401k or they can continue to work until the market recovers enough to get them back to what their account looked like before the crash

3. Fixed Index Annuities

Fixed Indexed Annuities are products sold by life insurance companies that are retirement accounts with some added protections. People have the options to switch their 401ks over into fixed indexed annuities. They do not gain as rapidly as a variable account does in terms of interest, but they have the added benefit that their money cannot go down due to volatility in the markets. After reaching a certain age, one is likely looking to protect their investment more than they are looking to aggressively grow their investment like they were in their younger years. For some people, protecting themselves from losing any money is more important than potentially gaining a high return on investment. This is not to say that fixed indexed annuities do not grow. Many of the indexes perform extremely well, especially over the long term because they are accounts that do not participate in market losses and only have upwards potential when it comes to the markets.