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Presented by MidAmerica Financial Resources. You can reach them at 618.548.4777 or greg.malan@lpl.com or on the web at www.mid-america.us

 

Retirement Now vs. Retirement Then

Retirement Now vs. Retirement Then

Today’s retirees must be more self-reliant than their predecessors.

Provided by MidAmerica Financial Resources

 

Decades ago, retirement was fairly predictable: Social Security and a pension provided much of your income, you moved to the Sun Belt, played tennis or golf, and you lived to age 70 or 75.

 

To varying degrees, this was the American retirement experience during the last few decades of the previous century. Those days are gone, and retirees must now assume greater degrees of financial self-reliance.

 

Social Security benefits will probably not keep us afloat in retirement. Generations ago, a retiree could potentially enjoy a middle-class lifestyle by pairing Social Security income with a pension from a lifelong employer. Today, pensions are scarce, and the maximum monthly Social Security benefit is less than $3,000.1

 

Seniors who think they can retire on Social Security alone are in for a rude awakening. The lesson: you must supplement Social Security benefits with other income streams or sources in retirement.

 

Many of us carry more debt than our parents and grandparents once did. It is much easier to borrow money (and live on margin) today than it was decades ago. The prospect of retiring with outstanding home, student, business, and auto loans is real.

 

Some of us are retiring alone. Once retired, we may share a residence with a sibling, child, or friends, which could offer us something of an economic cushion.

  

We will probably live longer than our parents did. Today, the average 65-year-old man is projected to live to 84; the average 65-year-old woman, to 87. Yesterday’s retirees could depend on a combination of Social Security, pension income, and fixed-income vehicles during a 10-year or 15-year retirement. In contrast, we may need to sustain a diverse investing approach during our probable 20-year or 30-year retirements.2

 

We will likely have to insure ourselves if we retire before age 65. Those of us who retire too young to be eligible for Medicare will have to try and find some kind of private health coverage in the interim, and it could be expensive. Out-of-pocket medical expenses will add further financial pressure.

 

Our retirement will differ from that of our parents. It will likely be longer; it will also offer us the potential for a great quality of life. We must plan ahead to try and meet its financial challenges.

 

MidAmerica Financial Resources may be reached at 618.548.4777 or greg.malan@lpl.com www.mid-america.us

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Securities and advisory services offered through LPL Financial, a Registered Investment Adviser, Member FINRA/SIPC.
MidAmerica Financial Resources and Malan Financial Group are separate and unrelated companies to LPL.

Citations.

1 – investopedia.com/ask/answers/102814/what-maximum-i-can-receive-my-social-security-retirement-benefit.asp [3/11/19]

2 – ssa.gov/planners/lifeexpectancy.html [3/29/19]

You Could Retire, But Should You?

You Could Retire, But Should You?
It might be better to wait a bit longer.

Provided by MidAmerica Financial Resources

 

Some people retire at first opportunity, only to wish they had waited longer. Your financial strategy likely considers normal financial ups and downs. That said, a big “what if” on your mind might be “what if I retire in a down time that doesn’t swing back upward in a year or two?” It could happen to everyone, and it certainly doesn’t work on your schedule. For that reason, the fact that you can retire doesn’t necessarily mean that you should.

 

Retiring earlier may increase longevity risk. The concern can be put into three dire words: “outliving your money.” Sudden medical expenses, savings shortfalls, financial downturns, and larger-than-planned withdrawals from retirement accounts can all contribute to it. The downside of retiring at 55 or 60 is that you have that many more years of retirement to fund.

 

There are also insurance issues to consider. Medicare will not cover you until you turn 65; in the event of an illness, how would your finances hold up without its availability? While your employer may give you a year-and-a-half of COBRA coverage upon your exit, that could cost your household more than $1,000 a month.1,2

 

How is your cash position? If your early retirement happens to coincide with a severe market downturn or a business or health crisis, you will need an emergency fund – or at the very least, enough liquidity to quickly address such issues.

 

Does your spouse want to retire later? If so, your desire to retire early might cause some conflicts and impact any shared retirement dreams you hold. If you have older children or other relatives living with you, how would your decision affect them?

 

Working a little longer might ease the transition to retirement. Some retirees end up missing the intellectual demands of the workplace and the socialization with friends and coworkers. They find no ready equivalent once they end their careers. Also, it may be difficult to find a part-time job in another field, so staying a while longer could help you make the change at a pace that will be more comfortable, both financially and emotionally.3

 

Ideally, you will retire with adequate savings and a plan to stay physically and mentally active and socially engaged, so waiting a bit longer to retire might be advantageous to your bottom line.

MidAmerica Financial Resources may be reached at 618.548.4777 or greg.malan@lpl.com www.mid-america.us

 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Securities and advisory services offered through LPL Financial, a Registered Investment Adviser, Member FINRA/SIPC.
MidAmerica Financial Resources and Malan Financial Group are separate and unrelated companies to LPL.

Citations.

1 – cnbc.com/2019/02/28/what-you-need-to-know-about-medicare.html [2/28/19]
2 – fool.com/personal-finance/2019/02/24/should-you-use-cobra-coverage-when-you-leave-your.aspx [2/24/19]
3 – news.stlpublicradio.org/post/more-older-americans-working-past-65-delaying-retirement [8/8/18]

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