The Wonderful Years. Your Golden Years. A Happy Retirement.
This season is a lifetime dream for most people. Thoughts come to mind of leisurely spending your days however you choose. Without a care in the world.
Unfortunately that’s not going to be the case for almost half of the workforce. A Gallup Poll shows that over 45% of workers believe they won’t have enough money in retirement.
Adults work their entire lives. Yet, many are still unable to have a comfortable retirement!
But that doesn’t have to be you. You don’t have to continue worrying about money.
Instead, choose to use your time wisely today. Plan for your future and have a happy retirement. Do the things you have always dreamed of!
Ensure that you have a happy retirement by learning from those who already are. Today’s retirees have 4 main concerns. They are outliving savings, health care, market volatility, and fraud.
According to an article from USAToday, the average life expectancy of a US citizen born in 2016 is 78.6 years. This average is up 7 years from a baby that was born in 1980.
Humans are living longer than ever thanks to advances in medicine and technology. This is a real positive for mankind, but also a harsh reality for many. For retirees, this leads to their biggest fear, running out of money.
Most people put money into a 401k and save just over 2% of their take-home pay every year. These funds, along with Social Security, are the only monies most seniors have saved to enjoy their golden years.
Social security is made up of two separate parts: Old Age and Survivors Insurance (OASI) and Disability Insurance (DI). OASI is what most people think of when referring to Social Security. This money gets paid out to retired workers, their spouse and dependent children, as well as survivors of a deceased worker.
Currently, OASI benefits are expected to run out of money in 2034. The fund that you have been contributing to your entire working life, may end up not paying 1 cent back to you!
The future of Social Security is uncertain. The program could get phased out or the rules for receiving it may change. Phasing out the program means that you won’t receive much, if any of it during your retirement. If the rules get switched, you won’t be eligible to receive it until later in life. Either way, you are giving away too much control of YOUR life to someone else!
Relying solely on Social Security and 401k savings are an ancient retirement strategy. One that Wall Street spends billions of marketing dollars reinforcing every year. Ensuring they make money off of you even if the assets they sell go down in value!
Instead, focus on investments that generate income. Use cash flowing assets, like real estate and dividend-paying stocks, to build your monthly retirement income. This modern approach will provide a stable income throughout your happy retirement years!
Retirement and health care are expensive. Start planning for your golden years today. Live on a budget. Don’t subject yourself to additional worry and running out of money in retirement.
It’s a fact. Your health declines as you age and most seniors worry about spending time in second rate health care facilities.
Many people believe that Medicare covers all their health care expenses in retirement. While it does have substantial deductibles, copayments, and limitations, it doesn’t cover many long term care costs.
Assisted living facilities are expensive! The median cost of a nursing home is over $90,000 per year. If you and your spouse need to live in a home, it alone will cost $180,000 per year. And that doesn’t account for inflation!
Many insurance providers do offer long term care insurance. You can buy an additional policy to cover expenses related to chronic medical conditions, disabilities, and disorders. Some even allow you to choose where you will receive care. This could be at home, an adult day care, or a nursing home.
Start preparing today. If you are eligible, open up a Health Savings Account (HSA). It’s similar to an IRA, but it’s for your healthcare. It grows tax-deferred and the contributions you make today are tax-deductible! The current HSA contributions limits are:
As you get closer to retirement age, increase the money in your emergency fund. I recommend having 12-18 months of your retirement expenses in a savings account. Continue using this money for unexpected costs. Converting your assets to cash will begin reducing your exposure to market fluctuations too!
The ups and downs of the market are stressful. And as it turns out, most market cycles are similar. They start out in recovery, which leads to both growth and oversupply, then ultimately ends in a recession.
Every market cycle has a downturn. And truth be told, you will inevitably experience at least one during your wonderful years, too.
This guarantee exposes you to sequence of return risk. This occurs when there is a downturn early on in your golden years. And since the market has dropped, you are required to sell more assets to sustain your lifestyle. If this happens for a long enough period of time, you could get forced to reduce your living expenses. Which, I am sure is not the happy retirement you have pictured!
Downturns in the market are most associated with stocks. One way to plan for market volatility is through buying bonds. When the stock market heads south, investors sell stocks and buy less risky assets, like bonds. As the demand for bonds increases, so do their values!
The 4% Rule is another way to combat market volatility. This strategy involves living on 4% of your total portfolio every year. Studies have shown that this is a safe withdrawal rate. It gives a 96% probability that you will be able to live on your money for at least 30 years!
Cash flowing assets, like real estate, can reduce your risk of declining income during market fluctuations, too. The monthly rental income can be used to pay for your living expenses. And that’s just one of the many benefits of owning rental property.
I strongly believe in cash-flowing assets. They are the #1 retirement tool that I use. My plan includes stocks and bonds too!
Scams are everywhere these days. There are inheritance, investment, and even romance scams!
These schemers target the elderly because their health and mental conditions are declining. Many live alone and don’t want to be a burden to others. Often, they don’t communicate with their family about the decisions they make.
Seniors are the most likely to have money and be at home too. Making them more likely to answer the phone when a con artist calls.
Scammers often portray themselves as investment professionals offering big financial gains. And since retirees have money concerns, they may get scammed or make bad money decisions.
The elderly can also be defrauded by a bad contractor or other individuals they feel that they can trust.
As you age, it gets even more important to have people you can rely on. Especially ones that truly have your best interests at heart. This could be members of your family or heirs to your estate. Some people even feel more confident having an independent 3rd party, like an attorney, involved in financial decisions.
Regardless of your age, always check the background of any professional you hire. A Google Search or the Better Business Bureau can provide a wealth of information (pun intended) on these experts!
As a former phone sales professional, take my advice – if someone is calling that you don’t know, it probably isn’t to chat. They are most likely trying to get your money by selling you something or asking for a donation!
Most people work their entire lives to get to the point where they can enjoy a happy retirement. They dream about the things they will be able to do, places they will vacation, and spending time with loved ones.
For most people, their incomes will decline and the days of receiving a paycheck will end. But their worries won’t stop. They will continue and grow.
That doesn’t have to be the case for you. It can all be different.
Start planning for your future today. The sooner you start, the less money you will need to save. The longer you will be able to take advantage of the 8th Wonder of the World, compound interest!
Take action, create a goal, and live on a budget. Your future self will be grateful that you did!
How are you preparing to have a happy retirement? Comment below.
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