Concerned that you’re behind on your retirement income planning? You’re not alone. According to a 2017 study from Gallup, more than 50 percent of Americans are worried they won’t have enough money for retirement.1 Retirement has been Americans’ most-cited financial worry every year that Gallup has conducted the study.
Even if you are behind, the good news is that you can quickly implement a plan to catch up. Make 2018 the year you review your retirement income planning and take action to stabilize your financial future.
Below are four tips to help you analyze your retirement income planning. If you haven’t looked at your retirement income plans in a while, or if you don’t have a retirement income plan at all, now may be the time to take action. The longer you wait, the more difficult your planning may be.
Review your time horizon.
Time may be your most valuable asset when it comes to retirement income planning. The longer you have until retirement, the more time you have to save money. You can use that time to strategize your savings and allow growth to compound.
Your time horizon will also influence your contribution strategy. If you have many years, or even decades, until retirement, you may wish to pursue a more aggressive contribution plan. If you’re approaching retirement, however, you might adopt a more conservative philosophy.
Estimate your expenses.
Another important step is to estimate your retirement income spending. It might be hard to accurately predict how much money you will spend each year in retirement. However, you can probably develop a reasonable estimate based on your current spending.
Think about how you would like to spend your time in retirement. What kinds of activities will you pursue? Where will you live? What kinds of bills will you face? The answers to those questions can help you develop a retirement budget. Also, be sure to consider inflation. Your expenses will naturally rise over time, so it’s important to account for these increases in your retirement budget.
Project your income.
Once you’ve estimated your retirement expenses, take some time to project your retirement income. This could be from sources like Social Security, pension benefits and more. Identify those income sources that are reliable and guaranteed for life.
Add up your total guaranteed* income and compare it with your annual retirement expenses. Will your projected income cover all your retirement costs? If not, you will have to rely on distributions from your retirement savings to fund your living expenses. A financial professional can help you develop a savings strategy so you can accumulate enough assets to generate your required income.
Create an emergency plan.
Life can change quickly. Emergencies pop up all the time. That doesn’t change just because you retire. In retirement, you could face unexpected costs for things such as home repairs, medical bills, long-term care and much more. Without a plan in place, those emergency expenses could erode your retirement assets.
Consider ways to prepare for unexpected costs. For example, you might make use of a health savings account (HSA) to pay for out-of-pocket medical expenses. You also may want to consider long-term care insurance to help pay for long-term care needs.
Ready to refresh your retirement income plan in 2018? Let’s talk about it. Contact us today at Safe Retirement Strategies. We can help you analyze your needs and objectives, and then implement a strategy. Let’s connect soon and start the conversation.
*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.
Licensed Insurance Professional. 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.
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Safe Retirement Strategies
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