Financial planning for retirees
Now what?
Most of the information floating around about retirement planning will address saving money. How to save more and maximize employer contributions. That is all important, but what if we told you that saving for retirement is only half of the battle?
Retirement planning is comprised of two major parts: the accumulation phase and the distribution phase.
In truth, the order in which you draw on your assets could have a significant effect on how long your money will last.
During the accumulation phase of retirement planning, the sequence of returns does not impact the ending value of the account. Many people don’t realize that once they start drawing money from the account, the sequence of gains and losses does impact the ending account value.
Sequence of return risk
How can we offset sequence of returns risk?
The Bucket Strategy
Creating buckets allows you to divide up money and allocate it based on its intended use.
Generates returns to offset spending from the spend reserve bucket.
Holds a few years worth of liquid funds to meet expenditures for current and short-term needs.
Actively manages risks by focusing on strategies that create guaranteed income and reduce losses during downturns.
Can your portfolio survive…
paying $82,128 per year for a semi-private room in a nursing home?
The average cost of a semi-private room in a nursing home is $225 per day. Depending on the long-term care need, you might instead hire a health aid for $20.50 an hour or pay $119 a day for care in an assisted living facility. Considering that 52% of people turning age 65 will have a long-term care need, this is a very real risk to retirement savings.
Read more here
How much, if any, of that risk are you willing to transfer to an insurance company?
Call us today to discuss your options for long-term care.