Plan for the Reality of Retirement

Posted on July 15, 2020

Underestimating life expectancy Twenty-five years ago, insurance companies estimated life expectancy at 83 years. Despite the volumes of media coverage generated over recent years about our increasing life spans, many investors still underestimate – often severely – just how long they could live. This plays havoc with retirement planning and finances. Many financial planners now develop retirement plans based on life expectancy of 90 to 95 years. While people get it intellectually, the implications of longevity haven’t been an integral part of their thinking. Long-term care needs The question you must ask yourself is, “Could my nest egg cover the potential cost of long-term care?” Premature long-term care can be steep and difficult to cover. However, the notion of spending a few thousand dollars a year for long-term care insurance, versus the possibility of hundreds of thousands of dollars in the future, is smart money management. Making large loans to family members You’re retired or on track for a comfortable retirement. A family member asks you for a large loan for a house, college, or to start a business. Many times, you’re not in a position to be as generous as you would like. Big withdrawals from your nest egg early in your retirement can seriously crimp your spending in later years. Underestimating expenses Don’t think you’ll spend a lot less money when you retire – forget all the old rules. Today, many retirees are healthy and quite active, including fixing up their houses and traveling—when we’re not living through a pandemic. Maybe their spending slows in later years, but not at first. The best move is to get a handle on current cash flow and expenses, so you can properly estimate your finances for retirement planning. While the need to grow your nest egg is critical, it’s also important to reman focused on the most important part of later life, what I call True Wealth: how you plan to spend your time and fill your days making memories with the people you love. Michael Bradley, CEO/President, Bradley Wealth Michael Bradley’s greatest passion in life is to help others experience True Wealth and live their life by their own design. With his friendly, proactive, and caring approach, Michael pledges to provide the finest wealth management service experience anyone has ever had. And if you aren’t a client, no problem; Michael pledges to be a warm and caring friend who reminds you to experience the utter joy in life, and to turn that joy into memories, which make up our True Wealth.  ]]>

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