Make Your Retirement Money Last

What are the chances you’ll run short of money in retirement? The Employee Benefit Research Institute, Washington, D.C., predicts that 47 percent of early baby boomers ages 56 to 66 and 43 percent of late boomers ages 46 to 55 are at risk of having insufficient income in retirement to cover basic retirement expenses, as well as uninsured health care costs.

These five tips offer the insight to help you achieve everything on your retirement bucket list.

Save more—The 10 percent savings objective that was the standard years ago might leave you short down the road. These days a savings goal of 20 percent of gross income is a better target, with that percentage increasing the later you start.

Plan for more expenses in retirement—Many retirees say they spend as much as, or more than, when they worked. As a general guideline, plan on replacing at least 80 percent to 100 percent of preretirement income. 

Be realistic about working in retirement—Despite plans to pursue some sort of employment in retirement, most retirees never return to work. If you intend to keep working past age 65, now is the time to ask employment counselors or your company’s human resources department for advice about continuing your career. 

Pay more attention to retirement planning—To be really well prepared, you and your financial professional should have a strategy for how you will manage and allocate your investments throughout your retirement years. From which accounts will you draw your income? How much can you afford to take out each year? How will you insure yourself so that your medical and long-term health-care needs are covered? How will your estate ultimately be managed and distributed?

Invest more aggressively when you are young—Generally speaking, higher returns come with higher risk. In one example, three investors each invested $250 per month for 25 years. The most aggressive of the three accumulated $422,546, the most conservative accumulated only $271,120 and the moderate investor ended up with $374,055. Typically, you can’t afford to take big risks in your 50s and 60s, so the time to invest for maximum growth is when there are decades between you and retirement.

Finally, one of the smartest, and easiest, steps to help you plan for retirement is to meet with a financial professional, like those at Mountain America. They can help you assess your situation and plot a course toward a successful retirement. To schedule your free consultation, visit a Mountain America location near you or call us toll-free at 1-800-748-4302.

These strategies do not guarantee a profit or protect against loss and may not be suitable for all investors. Each member’s specific situation, goals and results may differ. Past performance is not a guarantee of future results. Individual members should review with their Mountain America financial professional the terms, conditions and risks involved with specific products and services.
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