Surviving spouses have a lot to deal with when their significant other passes away. There is much emotional grief. Many financial and life issues arise, requiring their attention. All of this can be even more burdensome in times when economic uncertainty is strong.
For many people in retirement, this situation applies now. The cost of living is going up. Healthcare costs are often an ever-growing area of spending for many retirees, as their need for healthcare usually increases in later years. What’s more, surviving spouses are often left in a harder situation, as their expenses may not go down proportionately with their incomes.
Here we will look at some of the issues that surviving spouses can expect to face after their spouse is gone.
If retirement is looming on your horizon, you are probably wondering if you will have enough money to last you through the rest of your life. A secure guaranteed income stream can bring some peace of mind, but where exactly can you put one in place? After all, Social Security will provide some benefits, but will it be enough?
The good news is that even if you feel that you could have saved more money than what you have, there are still options for securing a guaranteed retirement income. Let’s take a deeper dive into what some of those options might look like, and what they can do for you.
When planning for retirement income, the devil is in the details. Once you are retired, you want to be sure that you have more than enough income for your lifestyle expectations.
One way to get a good grip on this is by mapping and estimating what you expect your future spending to be.
This can give you a high-level perspective of how much income you will need for your idea of a comfortable retirement. Everyone has a different situation. Because of that, the amount of annual income that you will need will likely differ from others.
That being said, you can still have more clarity in your income planning and decisions by seeing what others’ financial experiences are in retirement. One helpful metric in this regard is understanding which expenses can dominate your retirement spending.
Here are four expenses that can take a bundle out of your retirement money if you don’t plan for them. Having strategies for these costs, and your overall expenses, can go a long way toward keeping your retirement goals on track. Read More
Whether you bring home a paycheck or earn your keep from entrepreneurship, everyone has some primary income sources during their career. But things change in retirement.
Some folks continue to work in some fashion, often for their own enjoyment. However, chances are you won’t count on this same income source in the way that you did during your career. You may well have to find a way to replace this income with other income streams.
This brings up a big question: How will you draw income for your retirement spending needs?
An endless parade of financial articles talks about saving enough for retirement and minding your retirement budget. But what about having more than enough money for your lifestyle goals? Just accumulating sufficient savings to last through your entire retirement is only part of the picture.
Decumulation, the Final (Retirement) Frontier
“The decumulation of assets in retirement is obviously a much more complex problem than accumulating assets before retirement,” said Emmanuel Roman, CEO of PIMCO, in an interview with Advisor Perspectives. He continued:
“Because of its complexity, decumulation is unlikely to be solved with a single solution; we’re going to need to combine a number of good ideas from different corners of the industry to solve this problem. To make a significant difference, one should start with an important problem. A big one is how to protect retirees from sequence-of-returns risk, or the risk related to the timing of retirement.” Read More
Sequence risk is the risk that you will take a big loss early on in the life of an investment portfolio. It’s already bad when you have investment losses at the early start of your retirement. It’s equally bad when you take losses just before you retire.
But if you are retired and taking withdrawals when the portfolio losses happen, the impact of those losses is compounded. By taking a withdrawal, you are already drawing down the balance of money in your portfolio from what it was prior.
If your portfolio also sustains a loss at the same time, the effects of both will come together to affect you. You will not only have to eat the loss, but you will further deplete the balance in your portfolio. So the timing of your withdrawals matters, especially in relation to how your portfolio performs. Read More
Paying the bills after you retire is quite different from during your career. After all, the income you receive will come from a variety of sources, as opposed as to earned income or a bimonthly paycheck.
Social Security, your own investment portfolio, a pension (if you are lucky), and maybe even part-time work can be sources of income that help pay for your retirement lifestyle.
The trick is therefore to maximize the total amount of income that you receive. But many Americans worry that they won’t have enough income during retirement to meet their needs.
The Alliance for Lifetime Income conducted a survey of 3,119 adults regarding their financial readiness for retirement. Eight in 10 (80%) of them expressed at least some level of concern that they won’t have enough income after they retire.
The survey revealed that 18% of the respondents were extremely worried about this. Meanwhile, 26% were “moderately” concerned and 36% were “somewhat” concerned about this issue.
Here are six key steps you can take now to avoid these concerns and maximize your income. You don’t have to wait until you are retired to start planning out the rest of your life. Read More
When you are still working, a rock-solid financial plan will do wonders for helping you accumulate money for retirement. This strategy will laser-focus on growth and accumulation as top goals. With a financial advisor’s help, you could stay on track with your plan and gradually build your savings for later years.
But things change as you near retirement. This period is called the ‘retirement red zone‘ for a reason. It’s a time when new planning is needed. Your financial plan will need to change gears, in some ways, in its focus from growth to retirement income.
This can be tricky in some cases, as today we face different challenges in retirement than those before us did. Longer living is one such issue now.
It’s a very real concern for many retirees, as one study by Allianz Life found. In the study, six in 10 retirees ranked running out of money while they are still living as a greater fear than death itself.
Just like the plan for growing your money during your career, an income plan can help you maximize your lifetime cash-flow. In turn, you can better enjoy the hard-earned fruits of your lifetime of work.
Many years of hard work brought you to this point. Now it’s time for your money to work and let you enjoy a comfortable, lasting lifestyle. Read More
Earlier in your career, you focused on saving and growing your money so you could pursue your financial goals later in life. You might have worked with a financial advisor to do this.
Over the years, you socked away money in a retirement account and maybe even grew an overall portfolio. That meant having and following a strategy with a focus on accumulation and asset allocation. But as we reach the so-called retirement red zone — that crucial period of a decade before and into retirement — new planning is essential.
The income you earned from your career likely won’t be the same once you retire. Then there is the challenge of making your money work for you.
How do you ensure that the income you draw from your portfolio is as efficient and tax-wise as possible? You want to be sure that your money lasts as long as you need it to in retirement! Read More
Franklin Templeton’s annual Retirement Income Strategies and Expectations Survey (RISE Survey) was recently released for 2020. This is the ninth year that the RISE Survey has been published.
The survey examines the concerns and attitudes of retirement savers. And it contains some very interesting data for retirement planners and savers alike.
In it, people of many generations share whether they think they are ready for retirement. The survey also covers what they are doing to accomplish their financial goals before they stop working.
As usual, this year’s RISE Survey wasn’t any different in the insights it drove home. Here’s a roundup of some findings that might be helpful for your own retirement planning efforts. Read More