Retirement Planning

A recent survey found that about 50% of couples do not agree on how much money they should have saved by retirement.¹ However, new research shows that couples who engage in financial planning together tend to be happier and more successful during retirement. Interestingly, couples that score highly on cognitive interdependence (meaning they think of themselves less in individual terms and more as a couple) tend to involve their partners more in retirement planning. Better yet, once they agree on their financial goals for retirement, they tend to have a stronger sense of well-being and face retirement with more confidence — together.²

Outliving Our Savings

A 2019 survey by the Aegon Center for Longevity found that nearly half of Americans worry they will run out of money during retirement. People who retire in their 60s or early 70s may feel confident they have enough assets to last 20 years. But what if they instead live 25 or 30 years longer? The last thing you want to worry about in the latter stages of your life is running out of money, especially if you’ve begun incurring costs for long-term caregiving. One way to better prepare for a longer-than-expected retirement is to segment your retirement into stages and match those stages with a different income source. That way, you know where your money will be coming from in your 60s, 70s, 80s and even 90s.³

Bear in mind that a flexible estate plan allows you to fund those latter segments with money you have earmarked for your heirs. They may miss out on a financial windfall upon your death, but it’s better than having to use their own money to help pay for your expenses.

There are a variety of strategies for pairing income sources with retirement segments, including laddered bond portfolios, phased systematic withdrawal plans and annuities. Feel free to contact us to discuss what strategies may be best suited for your circumstances.

Earning Enough

One reason many Americans do not have enough money for retirement is that they may not be earning enough. A recent survey found that 70% of Americans live paycheck to paycheck. Not only does that not leave enough income for savings, but 63% say they’re not even earning enough to provide the lifestyle they want to live today.⁴

Saving Enough

Another problem is that you may earn plenty of income, but you’re not saving enough of it for the future. Interestingly, people who earn more tend to value the importance of savings: 79% of Americans earning over $150,000 a year believe saving is very important, versus just 54% of people earning $60,000 to $89,999.^⁵

Mental Well-Being

It also should come as no surprise that more than eight in 10 Americans of all ages believe that being financially comfortable is key to their mental and emotional well-being.⁶

Injury and Illness

A recent Nationwide Retirement Institute long-term care survey found that almost 50% of Americans are more afraid of falling than getting cancer. While 80% feel it’s important to live in a single-story house as they get older, 68% of people not yet retired say their current home has stairs.⁷

Old-Age Care

Seven in 10 adults would like family members to provide their long-term care if needed, but most of them don’t want to become a burden to their family.^⁸ That’s quite a dilemma. One way to ease this burden is to be able to share your assets or pay family members to be your caregiver. This is particularly important if one of your children has to reduce work hours or quit altogether to attend to your needs. By sharing your assets, you may get your wish for family care without your children having to sacrifice their livelihood.

Content prepared by Kara Stefan Communications.

¹ Fidelity. “2021 Couples & Money Study.” https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/about-fidelity/Fidelity-Couples-and-Money-Fact-Sheet-2021.pdf. Accessed March 7, 2022.

^² Veronica M. Lamarche. Psychology Today. Feb. 9, 2022. “For Couples, a Happy Retirement Requires Shared Goals.” https://www.psychologytoday.com/us/blog/love-chaos/202202/couples-happy-retirement-requires-shared-goals. Accessed Feb. 9, 2022.

^³ E. Napoletano and John Schmidt. Forbes. March 25, 2021. “Top 4 Retirement Worries—And How To Handle Them.” https://www.forbes.com/advisor/retirement/top-retirement-worries/. Accessed Feb. 9, 2022.

^⁴,⁵,⁶ Insurancenewsnet.com. Feb. 8, 2022. “Hard Times: 7 In 10 Americans Say They’re Living Paycheck To Paycheck.” https://insurancenewsnet.com/oarticle/hard-times-7-in-10-americans-say-theyre-living-paycheck-to-paycheck. Accessed Feb. 9, 2022.

^⁷,⁸ Ayo Mseka. Insurancenewsnet.com. Feb. 7, 2022. “Nationwide: Two-Thirds Of Adults Worry They Will Become A Burden.” https://insurancenewsnet.com/innarticle/nationwide-two-thirds-of-adults-worry-they-will-become-a-burden. Accessed Feb. 9, 2022.

 ^{Our firm does not offer tax or legal advice. Consult your tax or legal advisor regarding your situation.}

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial or investment advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.

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