Retirement Plan

Retirement PlanIf you do not have enough money set aside to live comfortably in retirement, when would you want to know about it?  The Baby Boomer generation is not prepared!  Perhaps the single biggest risk to a secure retirement is the risk of longevity.  The risk of longevity, you ask?  Doesn’t that mean living a long time?  What could be bad about that?  Yes, I mean the risk of living a very long time and the challenge it presents is that it will take a lot of money to spend one-third of your life in retirement.   The insurance industry reports that 40% of women and 26% of men who are age 65 today will live to be 90.

Most boomers are ignoring the longevity risk altogether.  In the most recent Confidence Survey by the Employee Benefit Research Institute (EBRI), only 24% said they are very confident they are financially prepared for retirement.  Only 27% have performed some kind of retirement income needs calculation.  Those who have a plan for retirement income are more likely to say they need over $1 million dollars to retire comfortably than those who have not done any planning.   Most Boomers do not have a clue how much money it is going to take to live a long life in retirement.

The decision about when to trigger social security benefits can have a major impact on the amount of income you have in the later stage of retirement.  The decision is more complex than most workers realize.  A mistake can be costly.

If you are fortunate enough to have a pension plan tied to your employment, the decision you face regarding which pension option to elect can have a major impact on your long term financial security, and not just yours, but if you are married, that of your spouse.

How will you manage lump sum accounts like your 401k plan once you retire?  How will you distribute income from this type of account?

Planning for healthcare costs in retirement is extremely important.  As we age, our need for healthcare increases and the cost of care escalates at a rate higher than the overall rate of inflation.  It is important to build inflation into any retirement plan.

Making a decision to retire is one of the biggest financial decisions you will face.  Planning early can help you avoid costly mistakes and give you the confidence that you are ready when that big day comes.

The longevity risk is not about running out of money at age 70, it is about running out of money at age 85.  The risk is real and it needs attention sooner rather than later to ensure you have enough to live on throughout a long retirement.  A secure retirement doesn’t just happen.  It takes careful planning years in advance.  If you are 50 or older the time to plan is now.

If you would like to discuss retirement planning, call us for a complimentary appointment.  540-772-4545 or send us an email:  [email protected]