Managing the Risk of Outliving Your Money
Managing the risk of outliving your money has become one of the top questions we hear from pre-retirees. In fact, according to TransamericaCenter.org research1, 42% of workers say they fear outliving their savings and investments.
Retirees face greater “longevity risk” today.
The Census Bureau says that Americans typically retire around age 63 for women and 65 for men. Social Security projects that today’s 63-year-olds will live into their mid-eighties, on average. This is a mean life expectancy, so while some of these seniors may pass away earlier, others may live past 90 or 100.2,3
How will Social Security work in the future?
For decades, Social Security took in more dollars per year than it paid out. That ongoing surplus – also known as the Social Security Trust Fund – may face funding challenges as early as 2034. Congress may act to address this financing issue before then, but the worry is that future retirees could get slightly less back from Social Security than they put in. It’s critical that pre-retirees estimate the amount of Social Security benefits they are expected to generate in the future.4
Preparing for out-of-pocket health care costs.
You can enroll in Medicare at age 65, but how do you handle the premiums for private health insurance if you retire before then? Striving to work until you are eligible for Medicare makes economic sense, and so does setting aside money to pay for health care costs. A healthy couple retiring at age 65 can expect to pay nearly $208,000 in lifetime out-of-pocket healthcare expenses, even if they have additional coverage such as Medicare Part D, Medigap, and dental insurance.5
Luck is not a plan, and hope is not a strategy.
Those who are retiring unaware of these factors may risk outliving their money. Creating a strategy may help you better prepare for retirement.
Crown Haven Wealth Advisors want to prove they are the financial advisor you can trust.
That’s why Indiana’s #1 fiduciary with 40 years of combined experience is offering a limited number of spots for our free financial planning sessions. No cost. No obligation.
And our team is happy to meet with you online or in our offices located in Carmel, IN.It’s not too late to secure your retirement for a future you can truly rely on. Click here to schedule a complimentary relationship visit or call (317) 564-4691 to speak with one of our specialists.
Sources:
- TransamericaCenter.org, 2021
- TheBalance.com, 2021
- Social Security Administration, 2021
- Kiplinger.com, 2021
- HealthView Services, 2021
