For over 40 years working with our clients, these are the 5 major risks we help them avoid when planning for Retirement.
Longevity risk refers to the possibility that you’ll outlive your savings. With retirement lasting anywhere from 10-40 years (perhaps longer depending on how early you retire) this is a very real issue for many retirees, especially now that most people are relying on their 401(k) and IRA funds instead of a monthly pension check.
Inflation isn’t so much a risk as inevitability. When you’re working, your income typically increases to keep pace with inflation. But after retirement, many individuals are living on a more or less fixed income, and inflation becomes a major factor. Consider this… Over a 25 year span, 4% annual inflation will devalue a $1,000 monthly pension to the equivalent of just $375.
Rising Healthcare Costs
One other lurking risk factor during retirement is the rising cost of healthcare. This can become even more of a problem if you are no longer covered under the benefits of the company that you were working for. Although Medicare offers some coverage, most retirees with health issues will have to pay a significant sum for their total healthcare bills out of their retirement fund.
Death of a Spouse
Even if two people really can live as cheaply as one (doubtful), one person can't pay all the household bills if her spouse dies and thereby causes Social Security and pension income to drop sharply.
When you’re working, down markets can be overcome. You’re still in the middle of the accumulation phase and, as long as you buy and hold, you have plenty of time to recover. That being said, a down market can wreak havoc if it occurs early in your retirement. The reason for this is that in retirement, you’ll likely start selling assets to generate cash. When you pull money out during a down market, you effectively lock in that loss making it hard to recover.
If you want a higher rate of return, do you have to have some risk?
The question is; does risk increase the rate of return or does risk increase the probability of losses?
Where can you put your Retirement Savings?
Fixed Indexed Annuity
Fixed Indexed Annuity
Fixed Indexed Annuity with guaranteed lifetime income rider
Fixed Indexed Annuity with guaranteed lifetime income rider.
You know what it takes to build a successful business. It takes vision, preparedness, skills and desire — not to mention a focused dedication to achieving your goals. If you are like most business owners, you’ve worked hard and made many sacrifices to grow your business. That’s why you should put just as much energy into protecting it as you did building it.
Ask yourself these important questions:
- Do I have a plan for my business when I retire?
- Is my business capable of continuing its success in the event of my or my partner’s untimely death or disability?
- Is my family adequately protected if something were to happen to me?
- Have I done everything I can to attract, retain and reward the key employees that are critical to my business?
If you answered "no" to any of these questions, you may want to consider implementing a formal business planning strategy. Proper planning can help you protect your business, attract and retain key employees, and help ensure that your business transfers in the manner in which you choose.
No business plan is complete without a financial strategy for the unexpected. Start by exploring all your protection options.
Most business owners spend the majority of their time working in their business instead of on their business. We can help ensure that the business protection needs that are critical to the long-term success of your business are taken care of.
Financial management is as much about managing operational risks as it is about managing business objectives. Whether you're a fresh start-up or well-established enterprise, continued operational foresight can help ensure your success and your roadmap for the future. Thankfully, an array of insurance products exist to help meet your needs.
The death or disability of an owner is one of the greatest threats to a business. Not only can it severely impact the day-to-day operation of the business, but it can raise all sorts of business succession and estate tax problems — proper succession planning can help.
Succession planning affects everyone who has an interest in the business — business partners, family members, and key employees. It is critical that you have meaningful discussions about often overlooked issues, such as who the ideal successor should be, what is the value of the business, and what is the timetable for transition. No matter what event occurs, either expected or unexpected, we can help you develop a succession plan that can help ensure a smooth transition according to your vision for the business' future.
Our firm is not permitted to offer, and no statement contained herein shall constitute, tax or legal advice.
You should consult a legal or tax professional on any such matters.