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Do You know What is Worse than being Dead? Being Dead Broke.

If you are concerned about outliving your money, read this now!

A shocking 64% of Americans have not saved enough for retirement and only 39% of Americans say they are very confident they will be able to retire comfortably.

Are you one of the many Americans who will struggle to provide for themselves in their later years? What would it feel like to not have enough saved? Put these fears to rest by developing a plan that will help you find the financial security you deserve. Start planning today by asking yourself the following 3 questions before it is too late.

1. How long will my retirement be?

You will first need to establish the age that you will retire. As simple as this sounds you should take into consideration the following reasons to work a little longer:

The longer you work the longer you save

  • Working longer allows you to continue to increase the amount of savings in tax-deferred accounts like an IRA or employer-sponsored accounts like your 401k.

Medicare doesn’t care for you (if you’re under 65)

  • If your employer assists with Health Insurance it may be wise to work until age 65 as that is when Medicare coverage will kick in.

Make sure you maximize your benefits

  • Social Security can be collected starting at age 62 but your benefit may be 20%-30% less than if you waited until full retirement age and you may be able to increase your benefit if you delay past full retirement age.

Easing into retirement

  • If you are married, you may want to talk to your spouse about staggering your retirements. If one spouse continues to work, it can ease the financial transition into retirement.

As grim as it might be to think about, you also have to consider how long your retirement and life will last. Women tend to outlive men, but it is also important to consider factors like family history, race, health, and lifestyle.

Overall there is no way to exactly predict the length of your life, but it is better to anticipate a long life. Nearly half of pre-retirees and retirees underestimate how long they’ll live by five years or more, according to surveys by the Society of Actuaries.

2. What do you want your lifestyle to be during retirement?

Plan on traveling, working a part-time job, volunteering, or visiting grandchildren? What you want to do during retirement will impact how much you need to have saved. It is very important to estimate your expenses. When estimating the amount, you will need to save for retirement, you need to consider your situation and avoid broad and general estimates.

To get a more personalized estimate focus on your expenses as they are today and think about whether these expenses will stay the same, increase, or decrease by the time you retire. For example, costs for commuting for work may go down while costs for health care may increase. It is all specific to your situation.

Be sure to include expenses that reflect the type of retirement that you want to live. If you plan to travel, make sure to estimate how much you will be spending on it.

Remember to take into account the potential impact of inflation and taxes.

3. What are your sources of income and how much do you have saved?

Social Security something most people rely on for a portion of their retirement income. Other options include but are not limited to:

  • 401k

  • IRAs

  • Annuities

  • Pension plan

The amount you will receive depends on the amount you invest, the rate of return, and other factors.

If you work during your retirement you can also count on that as an additional source of income.

Now that you have answered these questions compare your expected expenses and length of your retirement to your anticipated retirement income. From there you will have to formulate your plan. If there is a difference you may need to adjust by doing one of the following:

  • Save more immediately

  • Delay retirement

  • Work during retirement

  • Increase earnings on the retirement assets

  • Find a new source of retirement income

  • Spend less during retirement

Remember: A plan can only get you so far. It is important to review your plan and portfolio regularly to ensure you are on track to reach your goals. Retirement is an exciting time as long as you are smart about creating and following a retirement income plan. A financial professional can help you with your options, cater to your goals, and coming up with a plan that is best suited to you. To set up a free strategy call 716-568-8568.


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