Going Broke in Retirement

Going Broke in Retirement

Happy Retirement

Happy Retirement

Individuals top retirement concern is going broke during retirement. The number one worry is running out of money in retirement.

The next major concern in retirement planning is health costs followed but how much to withdraw in assets during retirement years.

In recent months, market fluctuations have also been a major concern, losing significant valuation of retirement plan assets such as a 401k plan at work has added to retiree’s stress levels. Of

Another factor one should consider in retirement is the cost of long-term health care plus care of aging relatives and dealing with diminished capacity and varying degrees of dementia.

Needing to work past retirement can also be a concern in order to pay one’s monthly expenses.

Creating a stream of income during retirement includes social security benefits, annuities, bonds and income paying dividend stocks.

Putting off taking early retirement is a plus and waiting to seventy years old is even better. With each year beyond age 62 your social security benefits will increase by 8 % each year until you reach the age of 70.

Don’t forget that when you reach the age of 70 ½ you will be forced to take partial redemption of your IRA and 401k accounts which will increase your annual tax burden. Roth IRA is the exception as the withdrawals are nontaxable and you are not required to take a minimum distribution after the age of seventy.

If you are considering purchasing an annuity, only consider a fixed annuity also referred to as an immediate annuity instead of a variable annuity that is pegged to the stock market movements. Variable annuities carry high commissions and annual maintenance fees.

Insurance products seldom make good investment choices and the long term returns are questionable at best.

Review your lifestyle spending and implement a retirement plan that balances current income level and asset base with your retirement goals.

Step to take in your review process:

 

  1. Review your Medicare and supplemental insurance options
  2. Identify monthly expenses
  3. Review your tax liabilities and how to save on taxes
  4. Learn how to maximize your social security benefits
  5. Convert traditional IRA to Roth IRA
  6. Check that your portfolio has a proper balance of assets, stocks, bonds and liquid assets such as savings accounts.
  7. Seek help when in doubt from a qualified financial professional.

Financial Quote of the week:

In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.

Warren Buffett

Daniel F. Iuculano, AAMS CMFC

Accredited Asset Management Specialist

Chartered Mutual Fund Counselor

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