Will You Outlive Your Money?
One of the most troubling concerns you will face as you near retirement age is whether you will have enough money saved to live on for the rest of your life.
This is a puzzling question for many Americans. First of all, unfortunately, very few people really know exactly how much money they will have at retirement age. With the majority of Americans placing all of their retirement savings into 401k-type plans, most of your money will grow at the whims of the market. Perhaps it will grow to the amount that you will need in order to take a comfortable income in your retirement years, or maybe it will not. The problem is, no one knows how the markets will perform, so it’s impossible to say with any certainty exactly how much you will have in your 401k plan at retirement. That is problem #1.
Of course, problem #2 is that you also don’t know how long you will live! The average life expectancy in the U.S. is now around 80 years, but obviously not everyone is “average.” You could pass away next year, or you could live well into your 90’s.
Most of the better financial planners will run some calculations for you, showing how much money you will need to have saved at retirement age in order to take a certain percentage as income for a selected period of years and maintain the lifestyle you want in retirement. However, trying to determine a specific number based on two uncertain variables is tricky at best!
How long you will live is largely determined by your health, so you can improve your odds of living longer by living a healthy lifestyle, but there are still no guarantees. What if you live 10 years longer than your financial plan? What will you live on then? You can see the problem with this approach.
But what if we could control the other variable? What if you could take steps in your younger years (or even as you near retirement) to make sure that you would have at least a minimum guarantee of what your retirement savings will be at your planned retirement age?
Luckily, this is something that you can control. By making wise choices with where you save your money, you can build a solid foundation of retirement savings that will be there when you need it.
As financial planners, sometimes it feels like people come to us wanting to know the one “magical” place where they can put their money and it will solve all of their financial issues. (Sorry to burst your bubble, but if you’re looking for a guaranteed 20% return…well, we’ll let you know if we ever find one!) While there may not be a magical investment vehicle that can promise to make you a millionaire in 10 years, there are sound strategies that you can use to grow and protect your wealth over time, without risking too much of of your hard-earned money.
Our goal is first and foremost to educate our clients on how money and financial planning works – a topic which most of our population is woefully uninformed about. We take a holistic approach to financial planning, which is why we will never just try to sell you a product. Our approach is one of strategy – not products. With the proper strategy in place, only then can we fill in products to suit your needs and solve the financial problems you are looking for solutions to. And yes, the biggest problem for many is the question – will you outlive your money?
If you are not sure of the answer to this question, please take this opportunity to find out! Contact us for a completely free financial analysis. One of our qualified retirement planning specialists would be happy to provide a detailed assessment of your retirement plan, and let you know if you are on the right track, or where you might want to consider making some adjustments.
Call us today at 614-536-0088 to request a free analysis, or complete the request form on our Contact page.