When we are young and able to work a full-time job, we depend on our weekly earnings to pay for our living expenses. All of this will change quickly, though, as soon as we retire from our career. The weekly paychecks stop coming in, but unfortunately the expenses don’t. That’s why it is important to have a plan in place and begin retirement income planning now to insure you don’t outlive your income as you get older.
Now is the Time for Retirement Income Planning
With today’s life expectancy at an all time high, with men living to an average age of 79 and women to 83, your average retirement income will have to last a lot longer than it did in the past. Longer life expectancies combined with the fact that most companies these days have reduced their benefits and eliminated pension plans, has retirees living on a fixed income, which many fear may not last their whole lives.
With the average retirement income dwindling, it can be a scary situation to be in. Unfortunately, this will affect a lot of people when they retire, who will be living on a fixed income. According to a recent Legg Mason study, almost two-thirds of working Americans do not have a plan for their perfect retirement income. The Long Term Living Association’s Retirement Income and Long-Term Care Insurance Specialist Michael FitzPatrick is worried about the lack of planning for retirement for Americans, “That’s an overwhelming and frightening statistic that runs counter to outliving income being the number one concern of retirees.”
In addition, according to Forbes, a recent survey of CPA financial planners indicated that 57% of their clients’ main concerns about retirement was depleting their savings too soon. Here are some tips for retirement income planning and how you can prevent outliving your retirement income and enjoy your golden years.
Tips to Prevent Outliving Your Income During Retirement
- Create a Retirement Budget – When contemplating retirement income planning, the first step is to prepare a budget. Consider the necessary and discretionary expenses so you will know exactly what to expect and how to plan for your monthly expenditures. This will give you a good idea of what free income you will have to spend.
- Verify Your Reliable Income Sources – Take the time now to research the reliable income sources available to you during retirement. Income sources may include lifetime income which is any reliable income you will receive during your lifetime including Social Security, pension, or annuities. Also, include any additional income sources including a post-retirement job, savings, and assets that include real estate or rental properties.
- Create a Withdrawal Strategy Plan – Different withdrawal rates affect how long your nest egg will last. People often underestimate how long savings will last and overspend, leaving them in a financial crisis. Experts typically suggest withdrawing 4% per year, however be sure to consider things such as your age, gender, and how much risk you are willing to take when completing your withdrawal strategy. For example, if you want to retire younger or are a female (women tend to outlive men), you may want to consider less than 4% to avoid outliving your savings.
Plan for the Perfect Retirement Income
The Long-Term Living Association (LTLA) has an advisory team that can help clients plan for their future needs to insure they have enough income to get through the retirement years. Now is the time to start thinking about the future and your idea of what the perfect retirement income will be. The team at the Long Term Living Association can help in planning and managing financial issues for retirement. Contact the LTLA at 800/868-1193 or via their website here for help with starting your retirement income planning today.
Our Retirement Income and Long Term Care Insurance Specialist