Boomers are less confident than ever that they will have enough money for a secure and comfortable retirement. According to a recent Insured Retirement Institute report, only 24% of Baby Boomers are confident their savings will last. This is the lowest level since the research study began in 2011.
Will you need to work longer than planned? Do you need to increase savings or adjust spending? What can you do now to work toward protecting your assets and your lifestyle in retirement?
Income Is Key
A good starting point would be to examine your sources of retirement income. It is of the utmost importance for individuals to understand their goals and have a well-thought-out financial plan that focuses on the key sources of retirement income: personal savings, social security and investments.
Stages of Retirement
As you move through the various stages of retirement, your plan may require adjustments along the way. Among the factors you'll need to consider:
Time: Short-term goals may require investments that provide liquidity and help preserve your principal. On the other hand, if retirement is many years away, you may be able to include more aggressive investments in your portfolio.
Longevity: Due to medical technology and healthier living, average life expectancy has increased to 78.8 years, according to the Centers for Disease Control and Prevention. When living longer in retirement is more likely, understanding how long your money will last becomes even more critical.
Inflation: While lower-risk fixed-income and money market investments may play an important role in your investment portfolio, in today’s low interest rate environment they may not provide enough growth to fight inflation.
Taxes: Even after you retire, taxes will remain an important factor in your overall financial plan. If you return to work, open a business, or move out of state, your tax bracket could change. Tax-advantaged investments may be effective tools for pursuing your retirement goals.
Prepare Today for the Retirement of Tomorrow
To ensure that retirement lives up to your expectations, begin establishing your plan as early as possible and consider consulting with a professional. With proper planning, you may be able to make your retirement whatever you want it to be.