The U.S. Census Bureau reports that the world population of those 65 and older is expected to double by 2060, eventually accounting for 20% of the global population.
With life expectancies continuing to rise thanks to modern medicine and scientific advancement, the risk of outliving money set aside for retirement is also increasing.
Below are a few notes for working toward your retirement outliving you rather than the other way around.
Documenting Your Plan for Retirement
Before leaving the workforce, an outline of your retirement finances as well as your strategy for building and maintaining your wealth should be written down as it is developed, ideally with the assistance of a financial professional.
Things like ordinary expenses, general income needs, and lifestyle expectations during retirement should all be taken into account.
Formulating a well thought out retirement plan will help to hold you accountable for making decisions that get you closer to your retirement goals as you approach or move through that part of your life.
Identifying Your Reliable Income
Reliable income is sustainable and guaranteed. Based on your personal circumstances, this can include Social Security, pensions, specific annuities with guaranteed income, etc.
Divide your reliable income by your general income needs and this will provide you with your reliable-income percentage. The higher the number, the less risk you have of running out of money due to varying market conditions.
If your percentage is too low, a financial professional can assist with taking on financial products that will guarantee income down the line. If the number is too close to 100%, it may be wise to diversify your portfolio and leave room for more potential growth and liquidity.
Potential Risks and Preparation
Retirements aren’t always smooth sailing. In addition to planning for income needs and building/maintaining your retirement savings, you should also account for potential retirement hazards that, if not dealt with intentionality and care, can derail your retirement years.
In recent years, tax rates have been altered, inflation has risen drastically, and the markets have been up and down. There is no telling what the future holds, but knowing what is at risk of occurring can help you and your financial professional safeguard against certain scenarios being detrimental to your ability to retire and stay retired.
A financial professional can guide your decisions for replacing the smaller of your two Social Security incomes in the event that one spouse passes. When necessary, they can facilitate the conversion of pre-tax accounts into post-tax accounts where future gains will be tax-free, avoiding the potential for rising tax rates. Professionals can also recommend products that will generate guaranteed lifetime income, allowing for more peace of mind with what the future could hold.
To schedule a complimentary financial review with Moore’s Wealth Management, click here or call our office at 770-535-5000, where a staff-member is awaiting your call Monday through Friday, 9AM to 5PM.
Sources:
[1] https://www.census.gov/library/stories/2023/11/world-population-estimated-eight-billion.html
[2] https://www.kiplinger.com/retirement/steps-to-make-money-last-in-retirement
This material is provided as a courtesy and for educational purposes only. Please consult your investment professional, legal or tax advisor for specific information pertaining to your situation.
Diversification and asset allocation do not assure or guarantee better performance and cannot eliminate the risk of investment loss. As with any investment strategy, there is the possibility of profitability as well as loss.
All information contained herein is derived from sources deemed to be reliable but cannot be guaranteed. All views/opinions expressed in this newsletter are solely those of the author and do not reflect the views/opinions held by Advisory Services Network, LLC.
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Guarantees provided by annuities are subject to the financial strength of the issuing company and not guaranteed by any bank or the FDIC.
