There’s no question that people are living longer these days. The number of American centenarians has been steadily increasing for years. In fact, the Centers for Disease Control and Prevention reports nearly a 44 percent increase of this group from 2000 to 2014.1 This trend is also noticeable on a global scale. A Pew Research study found there were four times as many 100-year-olds in 2015, worldwide, than in 1990.2 If you live to be 100 and retire in your early 60s, you could face a 40-year retirement. Will you be able to sustain a 40-year retirement? The idea of financing a retirement that long can seem like a daunting task. Fortunately, there are a few helpful tips that can make a long retirement entirely manageable.
Don’t be too conservative. It’s very common for newly retired people to shy away from investments in order to minimize loss. Since your retirement funds are no longer growing, and are possibly even being depleted, the fear of losing money in a downturn can be crippling. It can be unwise, however, to be too conservative with your investments. After all, growth is integral to offsetting inflation and the possibility of a longer life. Often, growth and risk go hand in hand. If you’re too conservative, you may limit your growth potential. A financial professional can help you find a balance between upside potential and downside risk. They may also recommend tools that can offer you growth opportunities and risk protection, such as annuities. Create a stream of guaranteed* income. One of the most helpful components of a long, financially stable retirement is having sources of income that are guaranteed for life. For Americans who don’t have a pension, the only such income they’ll receive will likely be Social Security. If Social Security payments aren’t enough, retirees often have to depend on distributions from their savings to finance living expenses. There are ways of using your savings to create other guaranteed streams of income. For instance, annuities can provide guaranteed income in a variety of ways. A financial professional would be able to help you select which terms and features best fit your financial situation. Delay Social Security. You may want to delay your Social Security filing to help manage longevity risk. Many retirees are tempted to file as soon as they’re eligible, or even at their full retirement age (FRA). This can sometimes be a mistake, though. You may maximize your benefits by waiting to file beyond your FRA. You can delay filing until the age of 70, and for each year you wait to file, there’s an 8 percent annual increase to the benefits. For example, if your FRA is 66 and you wait until age 70 to file, you could see your benefits increase 32 percent, or 8 percent per year for four years.3 That extra income could be helpful in the later years of retirement. Ready to plan for a long, happy retirement? Let’s talk about it. Contact us at J. Harris Financial. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation. 1https://www.cdc.gov/nchs/data/databriefs/db233.htm 2http://www.pewresearch.org/fact-tank/2016/04/21/worlds-centenarian-population-projected-to-grow-eightfold-by-2050/ 3https://www.ssa.gov/planners/retire/1943-delay.html *Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. 16439 - 2017/2/15
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