Imagine your ideal retirement - perhaps relaxing on a beach, traveling the world, or spending more time with loved ones.
But will you have the funds to support that lifestyle?
For most individuals today, pensions, where you receive a retirement check every month after working at a job for a certain number of years, are gone. Today’s retirement requires diligent personal planning.
Per the Bureau of Labor Statistics, only 15% of private sector employees receive traditional pensions now.
As pensions vanish along with expected social security income, the burden of funding retirement shifts almost entirely to the individual. This shift makes advanced planning not just ideal but absolutely essential to avoid lifestyle downgrades.
Without proper preparedness, you risk reaching retirement age without adequate savings or income streams to sustain your current quality of living - or face even bleaker outcomes like depleting funds entirely.
But with the right framework secured well in advance, you can construct financial pillars resilient enough to weather retirement's storms and uphold the lifestyle you desire. Read on as we reinforce the most essential pillars.
First, envision what an ideal retirement looks like for you...
Write down the activities, pursuits, and expenses you desire for retirement, including potential healthcare costs.
Revisit your vision regularly and adjust as your dreams evolve so your savings align with your future reality.
Simply saving cash alone won’t deliver the growth needed for a comfortable retirement. You need portfolio returns consistently exceeding inflation. Stocks may help counter inflationary forces, but concentrating solely on them leaves retirement dreams vulnerable to market ups and downs.
Therefore, work with a financial advisor to develop an investment plan aligned with your personal risk tolerance and goals. Choose smart investments focused on providing consistent, compounded growth no matter what’s happening in the market.
An advisor can assess your ability to stomach potential losses and then construct allocations accordingly. This may incorporate other assets like real estate, bonds, life insurance, annuities, and alternative investments.
Your life isn’t cookie-cutter, your retirement plan shouldn’t be either. It should be tailored to you.
Once retired, the focus shifts from accumulation to reliably generating income. While Social Security and pensions can offer baseline cash flow, other streams can provide future-proofed security.
One way to achieve this is by putting some of your retirement account into an annuity. An annuity is a long-term vehicle often used to create income for life. Many retirees have turned to annuities to guarantee income in retirement, no matter how long they live. It’s a way to turn your retirement account into your own personal pension plan.
Maybe real estate is your thing, and a portfolio of income-producing properties is another great way to get cash flow and keep building value in the property.
Also, certain insurance products offer tax-advantaged income streams. Permanent life insurance policies allow tax-free loans and withdrawals against cash value, potentially earning 5-9% annually. When suited to your situation, integrate insurance and annuities.
Consider the following income generators:
Get creative in finding ways to establish passive income channels so your retirement isn't dependent on just one income source.
Skyrocketing medical expenses threaten even watertight retirement strategies. With healthcare outpacing inflation, vigilantly prepare for this financial drain. Survey Medicare plans like Medigap and Medicare Advantage to handle copays, coinsurance, deductibles, and unexpected costs Medicare misses.
While no one likes “what if” scenarios, recognize long-term care needs could arise - whether injury, illness, or aging. Run numbers on long-term care insurance to estimate coverage for in-home care or facility nursing. Account for all premiums, medications, dental, hearing, procedures, and healthcare costs in retirement budget projections.
Together we stress test savings rates based on life expectancy and medical inflation. Ensure your nest egg is sustained through increased longevity and rising expenses. Though no perfect formula exists, a prudent plan covers healthcare unknowns so you can enjoy a worry-free retirement. Stay proactive; contain costs where possible.
Getting clarity on likely healthcare expenses early and having customizable coverage, reserves, and inflation-protected funding vehicles in place gives retirement confidence.
Not all debt is equal when planning for retirement. Debt used wisely can increase your income and retirement security. Debt used poorly can put your retirement at risk.
Good debt applies borrowed money to buy income-generating assets like rental properties or dividend stocks. Even with mortgage payments or interest, these assets make money for you.
Bad debt, like unpaid credit card debt, uses borrowed money for things that lose value, like extravagant vacations or impulse purchases. This debt drains your finances over time.
Before retiring: Minimize bad debt which only costs you money long-term. Keep or add good debt that builds assets making money for you.
In retirement: Good debt income streams keep producing income to live comfortably. Eliminating bad debt payments frees up more retirement cash flow.
The key is knowing which debts add financial value and which simply amount to money owed. Use borrowing power strategically to improve retirement finances, not jeopardize them.
Despite best laid plans, unexpected expenses happen - home repairs, urgent travel, medical events, car trouble, and more.
Retirement planning can be complex, requiring wisdom and expertise. Partnering with an experienced financial advisor provides invaluable support.
M Wealth Group specializes in retirement planning and gets to know your unique situation and goals, providing tailored guidance to help you reach them. A trusted advisor stays on top of changing market conditions and new products, ensuring your plan remains nimble and optimized.
We will track your progress and adjust to counteract inflation and other threats. With your future in expert hands, you can enter retirement with confidence. Click here to set up a consultation with our accomplished advising team today.
Your retirement and estate plans are closely linked, and it's important to factor in your legacy intentions.
While it’s essential to provide for your heirs, remember not to overlook your own retirement needs. Striking the right balance is key, and clear communication of your plans can help prevent familial disagreements. With thoughtful planning, you can ensure that your loved ones are cared for well after your time.
Like any major life transition, retiring securely requires thoughtfulness and diligent preparation. M Wealth Group’s advisors bring clarity to retirement planning complexities.
Contact us today for a complimentary assessment to review your retirement pillars and see if anything needs reinforcement. Discover how custom strategies can help safeguard the financial future you envision. Our team looks forward to guiding you toward the retirement you desire!