Recently, my son Lee and I wrote the book, Exit Strategies for a Secure Pre and Post Retirement. The book’s premise is based on LIVE and how to make sure no matter the circumstances and your asset picture, that you are positioned to take care of how to live the way you need to obtain your goals, objectives and risk tolerance.
This is what you should do to prepare to LIVE:
L — Longevity
Obviously, the longer we live, the more it will cost us. Benefits like social security and traditional pension plans are designed to pay out for your lifetime, but how long does your savings need to last? According to the social security administration, the average man in 1950 lived to be 65 and the average woman lived to be 71. Today, men are living an average of 19 years longer and women an average of 15 years longer, which means if you retire at age 65 today, you need to plan for at least 20 more years of income, if not more.
I — Inflation
According to the government’s 2.5 to 3 percent quoted inflation rate during the last 10 years, if a person retired 10 years ago with $100,000 worth of income needs, they would need approximately$130,000 today in order to have the same buying power. Keeping your money in low-earning instruments at one or two percent may not be enough to help you accomplish your goals.
V — Volatility of the market
Keeping the majority of your money in the stock market in hopes of earning high returns exposesyou to the double impact of income withdrawals combined with market downturn. To avoid out-living your money due to market loss, be aware of the danger zone and make sure you have a proper exit strategy in place for all your market investments.
E — Events that constantly upset what people are doing
Family issues, health concerns and acts of God can all conspire against the stability of your finances. You may not have control over these events, but you do have control over the allocation of your assets and the investment tools designed to protect and generate income from them. Retiring with security today begins with a sound financial foundation that takes advantage of the multitude of financial tools that are designed to protect you.
Stan Molotsky has been in the financial services industry since 1958. At SHM Financial, he focuses on retirement planning, wealth protection, tax minimization and pre- and post- retirement planning. For a complimentary copy of Exit Strategies for a Secure Pre and Post Retirement, please call 1 (800) MONEY-SHM.
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Published (and copyrighted) in South Jersey Biz, Volume 8, Issue 8 (August 2018).
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