Signs that you won’t run out of money for retirement
Many people still currently working or those who are retired often experience the fear of running out of money in retirement. A survey conducted by Allianz Insurance found that 61% of the Baby Boomer generation fear outliving their money more than their own death.
As you begin to seriously think about your retirement, you’re going to have questions about how much money you need to save or how much you should have saved to help secure a worry-free retirement. How can you be sure that you’ll have enough money to be able to do all of the things you want to do upon retiring? Will you have a reasonable amount of money left over to leave to your children?
Retirement worries shouldn’t cause you to have sleepless nights. Having a retirement income plan in place will reduce your chances of outliving your savings while increasing the odds that you’ll have a secure and rewarding retirement.
Planning is the key
Some common retirement goals with respect to income include:
- Maximizing your Social Security income
- Minimizing taxes on your income
- Allocating a part of your saving to lifetime income
- Reducing or eliminating income volatility
- Generating predictable income to cover essential expenses
- Generating secure income to cover late-in-retirement expenses
In order to meet these goals, you need to have a savings plan. The first thing that you need to do is to figure out, realistically, how much you need to have saved by the time you’ve reached retirement age. This is your “retirement number”.
Once you’ve determined your retirement number, then you have to devise a savings plan that allows you to get your savings target out of your budget and into a retirement account. And, you want the money that you’re saving to work for you by making much more money for your future use.
This means using the money wisely by investing your retirement savings. This is where some long-term planning can come into play because, while stocks come with a fair amount of risk, they are the most effective retirement savings investment. However, putting some of your money in bonds, which are a lower-risk, lower-return investment, offers you a kind of retirement insurance.
Having multiple streams of income ensures that you’re not going to get into financial trouble if one dries up. Some examples are Social Security benefits, investments from your retirement savings, part-time employment, investing in real estate, and annuities.
Your next step
Whether you’re planning for retirement or getting ready for retirement, it’s a good idea to revisit your estate plan or to create one if you don’t already have one in place. Your estate plan should closely follow your retirement goals.
At the Law Office of David W. Foley, San Diego estate planning attorney, we can help you understand how to take advantage of your retirement funds and assets as well as how to take advantage of beneficial tax rules. Working together, we can help to plan your retirement so that you and your family’s immediate and long-term interests are protected.